CUTS Centre for

International Trade,
Economics & Environment
Research Report

Child Labour in
South Asia
Are Trade Sanctions the Answer?

#0311
Child Labour in South Asia
Are Trade Sanctions the Answer?
Child Labour in South Asia
Are Trade Sanctions the Answer?
This paper was researched and written by Dr. Jayati Srivastava, Fellow, Centre for Contemporary
Studies, Nehru Memorial Museum & Library, New Delhi. Comments on the draft were received from
Mr. Mahesh C. Verma, Adviser, Minister of Labour & Chairman, ESIC Review Committee, Govt. of
India, Mr. Sajid Kazmi, Programme Manager, Children's Resource International, Pakistan and many
others, which have been suitably incorporated.

Published by:

CUTS Centre for International Trade, Economics & Environment

D-217, Bhaskar Marg, Bani Park, Jaipur 302 016, India
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Website: www.cuts.org

Edited by:
Deepmala V. Mahla and Pranav Kumar

Layout by:
Mukesh Tyagi

Cover Photo:
Courtesy – V. V. Giri National Labour Institute

Supported by:
The Ford Foundation, New York, USA
Under the Capacity Building on Linkages between Trade and Non-Trade Issues Project.

ISBN 81-87222-82-4

© CUTS, 2003

Any reproduction in full or part must indicate the title of the paper, name of the publishers as
the copyright owner, and a copy of such publication may please be sent to the publisher.

# 0311, Suggested Contribution: Rs.100/US$25

 Contents

Preface .................................................................................................................................................................. i

I. Introduction ................................................................................................................................................. 8

II. A Survey of Economic Theory on Child Labour .................................................................................. 14

III. Global Estimates on Child Labour ......................................................................................................... 24

IV. A Critical Analysis (Evaluation) of Trade Sanction Approach ........................................................... 44

V. Recommendations ...................................................................................................................................... 54

Endnotes ............................................................................................................................................................ 56

References .......................................................................................................................................................... 60
 List of Tables and Chart

Table 1: The minimum age for different types of employment under

ILO Convention 138 (Minimum Age Convention) ............................................................................... 13

Table 2: Levels of causality for child labour ...................................................................................................... 14

Table 3: Global estimates on children in economic activity, child labour,

and hazardous work by age group & gender 2000 ............................................................................. 24

Table 4: Percentage of 10-14 age group children in the labour force in South Asia ........................................ 25

Table 5: Economically active children and child labour in total workforce in countries of South Asia ............. 26

Table 6: Index of child labour in the countries of South Asia .......................................................................... 27

Table 7: Child population, child labour, school education and nowhere children in South Asia 1995 ............... 27

Table 8: Economically active children (5-14 years) in Bangladesh 1995/96 ........................................................ 28

Table 9: Working Children (5-14 years) in India 1991 ...................................................................................... 29

Table 10: Economically active children (5-14 years) in Nepal 1995/96 ................................................................ 33

Table 11: Economically active children (5-14 years) in Pakistan1996 .................................................................. 34

Table 12: Economically active children (5-17 years) in Sri Lanka 1999 .............................................................. 37

Table 13: Some labelling initiative aimed at child labour products in South Asia ............................................... 49

Chart 1: Number of child labour in South Asia 1995 ........................................................................................ 25

 Preface

The era of globalization is witnessing a reinvigorated focus on many social

concerns wherein the issue of labour standards has roofed up at the surface.
It has been the persistent demand of some northern countries, trade unions
and NGOs for incorporating the social issues in the World Trade Organization
(WTO). At the same time there are several governments, trade unions and
civil society organizations in the south, who oppose any such linkage.

Demanding the inclusion of social issues in the WTO implies opening the
window for endless non-trade issues including animal welfare, gender, human
rights and the like. This would contaminate the trade agenda and at the same
time overload the WTO.

This sort of linkage has immense potential for abuse as a protectionist device
of the North. The southern countries argue that, it would help only a few rich
countries, not global welfare.

Conservatively, labour was taken as a part of the country’s competitive

advantage, the idea of using trade measures to assuage child labour has a long
history. It dates back to the early twentieth century when the issue of child
labour was first associated with trade measures. The American Labour
Federation demanded that the peace treaty to conclude World War I include
a provision that no commodity shall be delivered in international commerce
in the production of which children under 16 have been employed.

This paper includes a survey of the various economic theories on child labour.
In general terms, child labour originates in household poverty, poor adult
wages, low wages paid to child labour, lack of education etc. At the theoretical
level, scholars have come up with different models on causes of child labour.
A dominant section of these theories consider poverty and household decision
making regarding their children the fundamental variable determining the
incidences of child labour.

South Asian countries, which record one of the highest rates of child labour
practices in the world, the poverty explanation of child labour situations is
predominant. Fertility, education, labour market, adult wages, capital market
and availability of credit have been underlined as important causes.

As a result of the advocacy by politically powerful lobbying groups supported

by Europe and US the trade sanction approach to encounter the issue of child
labour has gained influence since the nineties.

These sanctions were exercised to alleviate the problem of child labour by the
US policy-makers and also by some countries in the EU. The import of those
goods was banned in the production process of which child labour was used,
wholly or partly. The sectors affected in South Asia were the garment industry
in Bangladesh, the carpet industry in Nepal, the football industry in Pakistan
and the carpet and bidi industries in India.

Child Labour in South Asia M i

 These sanctions were asserted as a measure towards elimination of child
labour, so it is very important as well as logical to study the impact, did it
work, or did it not. If it did not, what really happened? The present paper has
explored the same and it can be concluded that the trade sanctions resulted
in contradiction of the basic objective, elimination of child labour. Poverty
alleviation was abraded which is the root cause of child labour, instead it
aggravated the sufferings of child labour and their families.

The experience as yet, asserts that the policies targeted at alleviating poverty,
illiteracy, liquidity constraints and distortions in the labour and capital markets
are more likely to retrench the virtual ubiquity of child labour.

It has been suggested repeatedly that to wean away children from work, they
should be provided free education. However, there is the feasibility aspect of
such a measure in terms of the costs of displacing the child labour. A study
was conducted by CUTS on “Eradicating Child Labour while Saving the
Child: Who Will Pay the Costs?” in 1999. As per this study, the estimated cost
of displacing child labour in India is $18.94bn.

The paper intends to give a brief exposition of the emergence of labour

standards in the multi-lateral regime. Also highlighted are the estimates on
and causes of, child labour. At the same time, it makes some useful
recommendations on how the issue of child labour can be addressed best at
the domestic as well as international level.

Jaipur, India Pradeep S. Mehta

April 2003 Secretary General

ii M Child Labour in South Asia


The World Trade Organisation (WTO)
being the chief trade regulatory body
has increasingly been called upon to
play a pro-active role in ensuring
compliance with core labour
standards including elimination of
child labour
In an increasingly competitive global
and liberalised economy, the
attempted linkage of trade with
labour standards is set to undermine
free trade and related economic
growth and development and may be
used for protectionist purposes.
8 M Child Labour in South Asia
I
Introduction
The process of globalisation and the accompanied integration of world trade
and economy has brought about a renewed focus on many of the social
concerns wherein the issue of labour standards, particularly the elimination
of child labour has surfaced on top of the policy agenda. In this context, the
World Trade Organisation (WTO) being the chief trade regulatory body has
increasingly been called upon to play a pro-active role in ensuring compliance
with core labour standards including elimination of child labour (also referred
to as the social clause).
The demand to append a social clause to the WTO agreement includes
elimination of child labour, amongst other labour standards. This raises three
fundamental questions: Firstly, should trade sanctions be used as an instrument
to ensure compliance with core labour standards from recalcitrant countries?
Secondly, do lower labour standards give exports from such countries an
unfair advantage? and thirdly, is WTO an appropriate forum to discuss non-
trade issues such as labour standards?
In general, labour standards seek to improve working conditions, living
standards and social progress by establishing rules and norms to guarantee
basic workers’ rights and by setting a framework for industrial relations and
the determination of working conditions. However, what constitutes core
labour standards remains debatable and may vary across different socio-
economic and cultural settings. In 1998, the International Labour Organisation
(ILO) under the Declaration on Fundamental Principles and Rights at Work
and its follow up spelt out certain core labour standards which includes
freedom of association, right to organise, collective bargaining, prohibition of
forced labour, equal remuneration and non-discrimination in hiring and
employment practices and elimination of child labour.1
Since the incidences of child labour are predominantly found in developing
countries which also have ‘lower’ labour standards, the demand for the
elimination of child labour as well as enforcing labour standards through the
instrument of trade is an attempt to raise the stakes for developing countries.
In an increasingly competitive global and liberalised economy, the attempted
linkage of trade with labour standards is set to undermine free trade and
related economic growth and development and may be used for protectionist
purposes (to protect jobs and higher wages in developed countries amidst fear
of flight of jobs to developing countries). It is also argued that compulsory
enforcement of labour standards will undermine the comparative advantage
of developing countries.
Developed countries see core labour standards as a necessary condition of fair
trade and maintaining efficiency in the labour market. They consider it as a
part of eliminating unfair trade advantage derived from labour exploitation
and use of child labour to produce items cheaply to edge out countries that
have higher labour standards and labour costs. Developed countries thus

There is no conclusive proof that the
so-called poor labour standards in the
developing countries have positive
correlation with export intensities of
these countries.
The attempted linkage of labour
standards with multilateral trade
regime has a long history.5 This
demand has long been supported by
many developed countries amongst
which the US has been the
torchbearer.
argue that if trade and labour rights are not linked, an international devaluation
of labour standards may occur with countries engaging in a competitive ‘race
to the bottom’ and the consequent dilution of workers’ rights.
Such argument does not have any economic rationale. According to Chatterjee
and Mehta (1998), there is no conclusive proof that the so-called poor labour
standards in the developing countries have positive correlation with export
intensities of these countries. Moreover, there is no evidence to suggest that
imports from developing countries cause unemployment in developed world.2
In the context of globalisation, two reasons have brought the issue of labour
standards to the fore, apart from the moral argument that the labour rights
should be protected. According to Chishti (2000), a growth in developing
countries’ exports of manufactured goods from 30 percent of their total
exports in 1980s to 70 percent in 1995 caused serious concerns in developed
countries, despite them being the protagonist of free trade. Moreover, the
tendency amongst MNCs and TNCs to shift labour intensive production units
to developing countries due to the availability of cheap labour, threatened the
employment opportunities in developed countries. As a result the developed
countries “called for universally agreed upon labour standards to be applied
to international trade” and also create provisions within the WTO to impose
unilateral trade restrictions on countries who fail to adhere to core labour
standards.3 Madden (1995) also points out that the renewed interest in linkages
between trade and labour standards is due to liberalisation, globalisation,
unemployment and communication. The manufacturers in the developed
world perceive cheap labour in developing countries as a potential advantage
accruing to developing country producers.4 As a result, new trade barriers are
being erected against the developing countries.
It is noteworthy that the US, which is seen to espouse the cause of child
labour as well as other core labour standards through the trade route, has
not ratified the Minimum Age Convention No. 138 of the ILO. Moreover,
amongst the eight core ILO Conventions, it has ratified only two (C182 Worst
Forms of Child Labour Convention and C105 Abolition of Forced Labour
Convention). Its commitment to the principles enshrined therein is thus
suspect in the same way as its attempt to append a social clause to the WTO.
Multilateral Trading Regime and Labour Standards
The debate on the linkage between trade and labour standards has long been
a concern of intergovernmental trade negotiations. The discussion below gives
a brief trajectory of the emergence of labour standards (that encompasses the
principle of the elimination of child labour) in the multilateral trading regime.
Child labour remains one of the core labour standards and in the multilateral
trade negotiations it is clubbed with other labour standards. Although
traditionally, labour was considered a part of the production process and
comparative advantage of a country’s trade relations, the issue of labour
standards routinely figured in international trade negotiations. In other words,
the attempted linkage of labour standards with multilateral trade regime has
a long history.5 This demand has long been supported by many developed
countries amongst which the US has been the torchbearer.
Child Labour
The idea of using trade measures to alleviate the problem of child labour dates
back to early twentieth century when in 1917 the American Labour Federation
(AFL) demanded that the Peace Treaty to conclude World War I should
Child Labour in South Asia M 9

The GATT system did not deal with
labour standards except that it
provided for restrictions on import of
goods made with prison labours under
Article XX (e).
Subsequently, the US and many
countries in the EU raised the
demand for the inclusion of labour
standards in the GATT regime at
several rounds of multilateral trade
negotiations.
10 M Child Labour in South Asia
include a provision that “no article or commodity shall be shipped or delivered
in international commerce in the production of which children under 16 have
been employed or permitted to work.”6 The AFL proposal was put up to the
Labour Commission but it failed to get a mention in the Treaty of Versailles.
However, the ILO set up in the year 1919 considered the task of “the abolition
of child labour and the imposition of such limitations on the labour of young
persons as shall permit the continuation of their education and assure their
proper physical development,” of special and urgent importance. Subsequent
attempts to prohibit goods in violation of international labour standards
including child labour were made in 1943 at the Congress of Industrial
Organisation, Textile Workers Union of America (1945) and British Trade
Union Congress in the mid 1950s. Since then, the issue has been raised along
with other labour standards but has recently assumed greater currency in
international trade for a variety of reasons (see section IV).
Labour Standards including Child Labour
As early as 1919, the Treaty of Versailles called upon governments to ensure
human conditions of work. In the same year, the US War Labour Policies
Board noted that “nations with higher labour standards are handicapped in
competition with nations having lower labour standards.”7 Later, the 1948
Havana Charter on the stillborn International Trade Organisation (ITO)
stipulated in Article 7 that “the members recognise that unfair labour conditions,
particularly in the production for export, create difficulties in international
trade, and accordingly each member shall take whatever action may be
appropriate and feasible to eliminate such conditions within its territory.”
Since the ITO never came into existence, the GATT system8 continued to
serve as a multilateral forum to regulate trade among the contracting parties.
The GATT system did not deal with labour standards except that it provided
for restrictions on import of goods made with prison labours under Article XX
(e).
Subsequently, the US and many countries in the EU raised the demand for
the inclusion of labour standards in the GATT regime at several rounds of
multilateral trade negotiations. In 1953, the US proposed appending labour
standard clause to the GATT as unfair labour standard (defined as “maintenance
of labour conditions below those which, the productivity of the industry and
the economy at large would justify”) as it “creates difficulties in international
trade which nullifies or impair benefits under this Agreement.” The proposal
basically demanded that GATT rules should allow a member country to take
action in case its benefits under GATT are being adversely affected by the
action of other country under the Nullification and Impairment clause [Article
(XXIII)]. No progress was made at this juncture. Thereafter, the decade of
eighties again saw renewed but unsuccessful US initiatives to bring in the
issue of labour standards within GATT, especially at the Tokyo Round of
multilateral trade negotiations.
At the beginning of the Uruguay Round of trade negotiations in 1986, the US
reiterated its demand for the inclusion of workers rights by asking parties “to
consider possible ways of dealing with worker rights issue in the GATT so as
to ensure that expanded trade benefits all workers in all countries.” The US
demand was seconded by the EU and likewise, the European Parliament’s
resolution on the new round in September 1986 supported the proposal of a
GATT Social Clause.9

At the Marrakesh Ministerial meeting
in 1994, the issue of labour standards
figured in the discussions but no
consensus could be reached although
France and the US were able to
persuade the trade negotiating
committee to allow discussion on the
issue in the preparative committee
for the WTO.
At Singapore Ministerial in 1996, due
to shift resistance and apprehension
about protectionism expressed by
developing countries, it was decided
that the ILO and not the WTO was
deemed an appropriate forum to deal
with the issue of labour standards.
In 1993, the International Confederation of Free Trade Unions (ICFTU) called
for the inclusion of an enforceable labour clause in the program of the WTO.
This demand subsequently won the support of the US government and the
European Parliament. On the eve of the Marrakesh Ministerial, the US
President at a summit meeting in Brussels in 1994 declared that “while we
continue to tear down anti-competitive practices and other barriers to trade,
we simply have to ensure that our economic policies also protect the
environment and the well-being of workers.”
As a result, at the Marrakesh Ministerial meeting in 1994, the issue of labour
standards figured in the discussions but no consensus could be reached
although France and the US were able to persuade the trade negotiating
committee to allow discussion on the issue in the preparative committee for
the WTO.10 The matter was not taken up by the WTO preparatory committee
and as of now, the WTO does not lay down any labour standards as a pre-
requisite for trade except under the General Exception Clause GATT XX (e)
(enabling Member-countries to initiate trade restrictive measures in cases
“relating to the products of prison labour” but does not envisage prohibition
of prison labour as such). The Preamble of the Marrakesh Agreement also
does not mention any labour standards but only states that “relations in the
field of trade and economic endeavour should be conducted with a view to
raising standards of living [and] ensuring full employment.” The issue however
remains inconclusive and has been raised intermittently at various WTO
Ministerial Meetings.
In the Singapore Ministerial in 1996, the US along with France and Norway
proposed the creation of a working group on labour standards within the WTO
to complement the work of the ILO. In face of stiff reservations and
apprehensions about protectionism expressed by developing countries, the
ILO and not the WTO was deemed an appropriate forum to deal with the issue
of labour standards. The Singapore Ministerial Declaration likewise spelt out:
“we renew our commitment to the observance of the internationally recognised
core labour standards. The International Labour Organisation (ILO) is the
competent body to set and deal with these standards, and we affirm our
support for its work in promoting them. We believe that economic growth and
development fostered by increased trade and further liberalisation contribute
to the promotion of these standards. We reject the use of labour standards
for protectionist purposes, and agree that the comparative advantage of
countries, particularly low-wage developing countries, must in no way be put
into question. In this regard, we note that the WTO and the ILO Secretariats
will continue their existing collaboration.”11
Subsequently, the matter came up again at the Seattle Ministerial in 1999
where the US and EU were successful in putting it up for discussion in a
working group. The EU favoured a joint ILO/WTO Standing Working Forum
on the issue while Canada proposed a WTO Working Group on the relationships
between appropriate trade, developmental, social and environmental policy
choices in the context of adjusting to globalisation. Although these proposals
did not envisage the use of trade as an instrument of enforcing labour
standards, the US President Bill Clinton, on his way to the Ministerial did
mention that in future trade sanctions could be used to penalise violators of
labour standards. This evoked strong reactions from developing countries’
grouping and ultimately the issue of labour standards proved most divisive and
contributed (among other issues) to the collapse of the Ministerial.
Child Labour in South Asia M 11

New ILO initiatives, among other
things (campaigns on ratification,
awareness drives, etc.) include the
establishment of the Working Party on
the Social Dimension of Globalisation
to address the issue of trade
liberalisation, employment and
investment with a special focus on
poverty reduction and a proposal to
form a global commission of eminent
persons to examine the social aspects
of globalisation.
The ILO Minimum Age Convention,
1973 (No. 138) has prescribed
minimum ages for working children
depending on the type of employment
or work, leaving it to the individual
countries to determine the contents of
these activities.
12 M Child Labour in South Asia
The WTO Ministerial Meeting in Doha, Qatar in November 2001 did not
depart from the consensus built earlier and reaffirmed the declaration made
at the Singapore Ministerial Conference while noting the work of the ILO on
the Social Dimensions of Globalisation.
Thus, within the WTO framework, the status quo is being maintained on this
issue. Meanwhile, within the ILO framework, some renewed initiatives are
being taken to alleviate the problem of child labour. These new ILO initiatives,
among other things (campaigns on ratification, awareness drives, etc.) include
the establishment of the Working Party on the Social Dimension of Globalisation
to address the issue of trade liberalisation, employment and investment with
a special focus on poverty reduction and a proposal to form a global commission
of eminent persons to examine the social aspects of globalisation. In 1999, the
ILO Member Countries agreed to prohibit and eliminate the worst form of
child labour defined to include all forms of slavery, child prostitution and
pornography, use of children in drug trafficking and work which is harmful
to health, safety and morals of children. It was also recognised that child
labour is a product of poverty and the solution to the problem lay in economic
growth and development.
This multilateral consensus notwithstanding, the US and countries in the EU
have been taking some unilateral trade restrictive measures to enforce labour
standards, particularly against child labour and the prime target of such
initiatives have been the South Asian countries. Before we discuss the
magnitude, extent and causes of child labour and related trade measures in
South Asia, it is imperative to discuss major theoretical models explaining the
phenomenon of child labour. This will enable us to understand specific causes
of child labour in different countries of South Asia and the futility/utility (if
any) of trade sanctions approach to deal with this problem.
What is Child Labour?
In order to put the issue in perspective, it is important to understand the
meaning of the term child labour, which is different from economically active
children.12 Child labour is work carried out to the detriment of the child in
violation of international law and national legislation; the work that results
in the denial of childhood, education and life opportunities. It involves children
working for long hours on low wages, often under conditions harmful to their
health and physical and mental development.
The ILO Minimum Age Convention, 1973 (No. 138) has prescribed minimum
ages for working children depending on the type of employment or work,
leaving it to the individual countries to determine the contents of these
activities. According to the Convention, the minimum age of a working child
under normal circumstances should not be less than the age for completing
compulsory schooling and in no event less than age 15 years. For light work,
the minimum age is 13-15 years. The minimum age for hazardous work may
not be less than 18 and in some cases 16 years under strict health, safety and
moral conditions. For developing countries however, the minimum age can be
14 in general and 12-14 years in case of light work. This framework thus
provides a working definition of child labour (Table 1).
 Table 1: The Minimum Age for Different Types of Employment
under ILO Convention 138 (Minimum Age Convention)

General Minimum Light Work Hazardous Work

Age
In normal circumstances 15 years (not less 13 years 18 years (16 years
than age of subject to health,
completion of safety and moral
compulsory considerations)
schooling)
Where economy and 14 years 12 years 18 years (16 years
educational facilities subject to health,
are insufficiently safety and moral
developed, i. e., considerations)
developing countries
Source: ILO, Minimum Age Convention 1973, C. 138.

The Convention stipulates that signatory states must initiate adequate national
policies for the effective abolition of child labour and to progressively raise the
minimum age for employment or work to a level consistent with the fullest
physical and mental development of children. Further, according to the Worst
Form of Child Labour Convention, 1999 (No. 182), unconditional and worst
forms of child labour are defined to include slavery, trafficking, debt bondage
and other forms of forced labour, forced recruitment of children for use in
armed conflict, prostitution and pornography, and illicit activities.13

Child Labour in South Asia M 13

 II
A Survey of Economic Theory on
Child Labour

Explained in general terms, child labour originates in household poverty, poor

adult wages, low wages paid to child labour, low importance given to education,
and lack of enforcement of labour laws, etc. According to the ILO, child labour
can be explained at three levels: immediate causes, underlying causes and
structural and root causes (Table 2). The dynamics and the mutual interplay
of these factors play a role in determining the incidences of child labour.

Table 2: Levels of Causality for Child Labour

Immediate causes
Limited or no cash or food
stocks; increase in price of
basic goods
Family indebtedness
Household shocks, e.g. death
or illness of income earner,
crop failure
No schools; or schools of poor
quality or irrelevant
Demand for cheap labour in
informal micro-enterprises
Family business or farm
cannot afford hired labour
Source: ILO, A Future Without Child Labour, Geneva: International Labour Office, 2002, p 47.
Underlying causes
Breakdown of extended family and
informal social protection systems
Uneducated parents; high fertility
rates
Cultural expectations regarding
children, work and education
Discriminatory attitudes based on
gender, caste, ethnicity, national
origin, etc
Perceived poverty; desire for
consumer goods and better living
standards
Sense of obligation of children to
their families, and of “rich” people
to the “poor” people
Structural or root causes
Low/declining national income
Inequalities between nations and
regions; adverse terms of trade
Societal shocks, e.g. war,
financial and economic crises,
transition, HIV/AIDS
Insufficient financial or political
commitments for education,
basic services and social
protection; “bad” governance
Social exclusion of marginal
groups and/or lack of legislation
and /or effective enforcement
Lack of decent work for adults

At a theoretical level, a number of scholars have come up with different

A dominant section of theories
consider poverty and household
decision-making regarding their
children as the fundamental variable
determining the incidences of child
labour.
models on the causes of child labour. A dominant section of these theories
consider poverty and household decision-making regarding their children as
the fundamental variable determining the incidences of child labour. Others
consider nature and level of education and schooling as the primary determinant
and poverty as a secondary variable in explaining child labour. The structure
of labour and capital market is also cited as an important factor in explaining
child labour. In all these theories however, poverty plays a significant role.
The section below discusses major theories on child labour in brief.

14 M Child Labour in South Asia


The economic utility of children is of
two types: one, short-term when
children work and earn income and
the other long-term, where children
attend school to augment their skills
and support the family in their old
age.
According to the model propounded by
Becker (1960), number of children/
fertility is determined by cost-benefit
analysis regarding children in a
household, considered as a single
decision-making unit.
Children as Household Assets
The household behaviour theory assumes household as a primary unit where
decisions are taken regarding sending their children to work or school. This
model discusses parent’s motives to have children which are: psychological
need to have children and/ or benefit that parents hope to accrue from their
children. The economic motive may consider children as an important asset
to supplement household income; substitute hired labour in family units and;
provide security in old age and disability situations. The economic utility of
children is of two types: one, short-term when children work and earn income
and the other long-term, where children attend school to augment their skills
and support the family in their old age.
Basu (1998) classifies the household behaviour theories into two categories:
intra-household bargaining and extra-household bargaining models. In the
intra-household bargaining model, household is characterised by a single unit
where one person takes decisions or where all persons have the same utility
functions. In the unitary model of household, the head of the family takes a
decision regarding work to be done by other family members, especially
children. However, it has been pointed out that the household is riddled with
mutual bargaining and conflict situations and decisions are often influenced
by all members of the family rather than the head of the family alone.
Therefore, child labour is the outcome of bargaining between parents or
between parents and children where the bargaining strength of different
members is determined by resources that one procures for the family, fall-
back options, wealth, number, age and gender of children and wages of an
individual, etc.14 According to Khan, et al, (forthcoming) “it is poverty and
need, and not the maximizations of welfare of a household tyrant, that drives
children to work” but the possibility of abuse of power by the self-interested
household cannot be ruled out.15
In the second model, children have no or very limited bargaining power and
parents take decision regarding children’s work keeping in mind their own
selfish and economic interest. This model argues that bargaining takes place
between parents and employer and the wage of the child is dependant on the
bargaining strength of the household determined by household income and
access to credit. Gupta (1998) on the basis of his analysis of some villages in
West Bengal, India has propounded the argument of negligible bargaining
power of children in a household.16
Some of these household behaviour theories consider fertility as an important
explanatory variable in the incidences of child labour. According to the model
propounded by Becker (1960), number of children/fertility is determined by
cost-benefit analysis regarding children in a household, considered as a single
decision-making unit. He argues that “an increase in income increases both
quantity and quality of children but the quantity elasticity of demand for
children is smaller than the quality elasticity of demand for children.” According
to Easterlin (1969), in societies where children enter labour force at a younger
age, the economic expectations from children’s prospective income would
determine the fertility decision of the household and produce more children
with a view to augment household income.
According to Caldwell (1976), in traditional and primitive societies, children
start contributing to family income at an early age, take care of parents in
case of disability and also old age and hence, are of greater value. Given this
situation, the net flow of wealth is unidirectional from children to parents.
Child Labour in South Asia M 15

Studies have documented that the cost
of bearing and rearing farm children
is lower than the non-farm children
and that opportunity cost of rural
children is smaller compared to those
in urban areas – a factor explaining
high fertility in rural areas.
a large family size may also explain
high incidences of child labour. It is
likely that the larger families
increase the possibility of children
working. It is also suggested that
children with more siblings are likely
to work longer hours when they are
older.
16 M Child Labour in South Asia
Thus, the time and resources used in bearing and rearing a child is considered
as an investment cost for the future productive capacity of child in situations
where children’s labour force participation occurs at a very young age. Studies
have documented that the cost of bearing and rearing farm children is lower
than the non-farm children and that opportunity cost of rural children is
smaller compared to those in urban areas – a factor explaining high fertility
in rural areas.17
Some scholars view the need for more children as an indispensable input in
peasant economies. The work of Mamdani (1972) on peasant’s households in
India highlighted the significance of the children’s work for the poor peasant
families. He argues that high fertility is essential in peasant economy as it
requires a large number of working children to complement the work of
adults. UNICEF views the lack of investment in basic services and labour-
saving technologies in an underdeveloped economy as a crucial factor which
makes a large number of children desirable, even essential, as a source of
help in fields and homes.18
Viewed in value terms, number of children is determined by the parent’s
decision on the quality-quantity trade-off. According to Becker and Lewis
(1973), parents who choose more children are less likely to invest in quality
schooling which implies that number of children and investment in human
capital of children in terms of quality education are interchangeable. According
to the 1974 World Bank Report, due to high fertility “parents expect children
to contribute to the family income rather than be educated.”19 According to
Rosenzweig and Wolpin (1980), an increase in fertility lowers child quality.
Hanushek (1992) also points to a trade off between large family size and
schooling in the US. According to Patrinos and Psacharopoulos (1997), “on
average, children in large families in both developed and developing countries
receive less schooling, perform poorly on intelligent tests and are less well
nourished.” Analugously, Powell and Steelman (1993) explicit that children
born in quick succession receive least investment.20
Furthermore, a large family size may also explain high incidences of child
labour. A study on developing countries by Lloyd (1994) argues that larger
household size reduces children’s participation and progress in schools as well
as parent’s spending on education of their children. It is likely that the larger
families increase the possibility of children working. It is also suggested that
children with more siblings are likely to work longer hours when they are
older. The impact of high fertility on child labour are felt more by the first
born children and the gender dimension makes it likely that boys are engaged
in market work while girls are engaged in domestic or farm work.21
According to Dessy (2000), low parental skills coupled with high fertility
results in an increased reliance on child labour and the creation of a poverty
trap which reinforces the trend towards child labour through generations.
“The greater the number of children, the less income is earned by the parent
[due to time devoted to child care activities] and the more the incentive to rely
on child labour rather than send children to school.”22
The study by Sharif (1994) points out that children from landless and marginal
farms are more likely to engage in wage labour whereas those with larger
farm lands are engaged in agricultural activities. As the farm size increases,
child labour also increases. However the situation reverses where larger farm
households cease to operate their own land and rent it out.” Christian and
Kanbur (1995) also infer that both the size of the farm and the mode of

A poverty trap is created when child
mortality is high and child labour is
socially acceptable.
Child labour declines as one move
from low-income to high-income
countries. Correspondingly, labour
force participation by children
between 10-14 years is the highest in
world’s poorest countries, reaching as
high as 49 percent in Burundi, 45
percent in Uganda and 42 percent in
Rwanda.
operation will influence the effect of fertility and household size on child
labour.23
Eswaran’s (1996) model links child labour, poverty and fertility. He argues
that a poverty trap is created when child mortality is high and child labour
is socially acceptable. Eswaran proposes that “when children are needed to
provide old-age security, allowing parents to put their children to work [it]
may induce parents to substitute away from small, more educated to large,
less educated families.”24 Similarly, according to Cain, Mazumdar and Alam
(1980), for poor households, child labour is part of the household self-insurance
strategy to minimise risk arising out of loss of employment, failed crops,
disability, illness, etc.25
The above discussion highlights the fact that parents’ decision to send children
to work is predominantly a product of household poverty, apart from other
factors such as fertility, size of the household and size of land holding. In
poverty situations, children are considered as an asset to supplement household
incomes and ensure subsistence of families. In addition, the level of economic
development of a country is considered to be an important factor in explaining
the prevalence of child labour as discussed below.
The Poverty Hypothesis
According to the United Nations Children’s Fund (UNICEF), “where society
is characterised by poverty and inequity, the incidence of child labour is likely
to increase. For poor families, the small contribution of a child’s income or
assistance at home that allows the parents to work can make the difference
between hunger and a bare sufficiency . . . A high proportion of child
employees give their entire wages to their parents. Children’s work is
considered essential to maintaining the economic level of the household.”26
Thus, child labour is a by-product of poverty – a factor which is considered
the cardinal explanation of child labour.
Based on a country-level correlation between incidences of child labour and
GDP per capita, Krueger (1996) has established a negative correlation between
per capita income and labour force participation by children. According to him,
child labour declines as one move from low-income to high-income countries.
Correspondingly, labour force participation by children between 10-14 years
is the highest in world’s poorest countries, reaching as high as 49 percent in
Burundi, 45 percent in Uganda and 42 percent in Rwanda. In contrast,
countries with more than $5000 GDP per capita, record no incidences of child
labour. Besides, “while child labour is considered a necessity for economic
survival in some societies, it is considered an abomination in others.” Therefore,
it is hard to subscribe one minimum age of work in all countries. According
to Krueger, “economic growth appears to be an important way to reduce child
labour. If trade agreements increase the wealth of nations, then developing
countries that are a party to such agreements would be expected to more
readily adopt child labour standards after trade has expanded.”27 Martin’s
(1996) study also points out that labour force participation rate for children
aged 10-14 declines with the rise in GNP per capita. Also, labour force
participation rate of children is negatively correlated with school enrolment
figures.28
According to Fallon and Tzannatos (1998), “both the incidences of child labour
and children as a proportion of the total labour force decline with per capita
Child Labour in South Asia M 17

Labour force participation of
children aged 10-14 is high (30-60
percent) in countries having per
capita GDP of US $ 500 or less (1987
prices) which declines to 10-30
percent in countries with income in
the range of US $ 500- US $ 1000.
Indian policy makers have not
regarded mass education as an
essential element in India’s
modernisation programme. Such
reluctance to adopt and implement
compulsory education programmes and
indifference to low enrolment and
high drop-out rates has resulted in
one of the highest rates of child
labour in the world
18 M Child Labour in South Asia
GDP.” Thus, labour force participation of children aged 10-14 is high (30-60
percent) in countries having per capita GDP of US $ 500 or less (1987 prices)
which declines to 10-30 percent in countries with income in the range of US
$ 500- US $ 1000. Nonetheless, the decline in the labour force participation
of children is less marked as GDP rises in more affluent countries (US $ 1000-
US $ 4000). The cultural factors may also play a role in influencing this
relationship and also the structure of production. According to them, “the
higher the share of agriculture in GDP, the higher the incidences of child
labour.” Also, child labour declines with educational enrolment although the
results may vary across countries.29
Here it must be mentioned that the poverty explanations of the child labour
operate at two levels: country levels and household level (as discussed above)
and are the principal explanations for the phenomenon of child labour.
Relationship between Child labour, Poverty and Schooling/Education
As noted in the above models, poverty remains an important variable in
explaining the incidences of child labour. However many theorists provide a
missing link in the poverty explanation by propounding the factor of education.
Their central argument is that children work because the returns to work
experience exceed the returns to schooling, particularly in countries where
schooling is of low quality or high cost or where the extent of technological
dynamism limits the payoff to school-learnt skills or there is an absence of
link between educational qualifications and life opportunities. In situations,
“when returns to education outpace returns to work, families will probably put
a higher priority on education and keep their children in school rather than
sending them to work.”30
A pilot survey sponsored by the United Nations Educational, Scientific and
Cultural Organisation (UNESCO) and UNICEF in 1994 in 14 least-developed
countries “reinforced concerns about the actual conditions of primary schools.”
In half of these countries, classrooms for grade 1 have sitting places for only
4 in 10 pupils. Half the pupils had no textbooks and half the classrooms did
not have chalk-boards.” The size of a classroom was an average of 67 pupils
per teacher in Bangladesh and nearly 90 per teacher in Equatorial Guinea.
Besides, the quality of teaching was found to be frequently abysmal and
teacher’s conduct often violent, which might easily result in the child’s/parents’
decision to drop out of school. The drop-out rate in developing countries is as
high as 30%. 31 Such dropouts join the labour force, thus reinforcing the
incidences of child labour.
Weiner (1991) argues that India’s low per capita income and level of economic
development are less relevant explanation for child labour. According to him,
Indian policy makers have not regarded mass education as an essential
element in India’s modernisation programme. Such reluctance to adopt and
implement compulsory education programmes and indifference to low
enrolment and high drop-out rates has resulted in one of the highest rates
of child labour in the world and one of the lowest rates in school attendance
not to mention the overall poor literacy levels.32
Bhalotra (1999), using data for 2,400 households in rural Pakistan, points out
that acute poverty makes the opportunity cost of sending a child to school
very high who may then join the labour force. This evidence is stronger for
boys than girls.33 Ray’s (2001) comparative study on Bangladesh, Nepal and
Pakistan shows a “U-shaped relationship between inequality and child labour34

It must also be pointed out that
similar poverty levels may produce
different outcomes for child labour
and schooling. e.g, two states in India
– Kerala and Uttar Pradesh (UP) –
despite showing similar economic
growth, have shown diverse pattern
vis-à-vis child labour as well as
educational attainments of children.
Overall, poverty, lack of education
and child labour reinforce each other
because “child labour excludes or
restricts access to education and
jeopardises the chances of upward
social mobility.
on the one hand and an inverted U relationship between inequality and child
schooling on the other.” According to him, compared to inequality, poverty
plays a less important role in explaining child labour participation rates both
at the household and cluster levels. He opines that ‘inequality’ can explain the
high incidences of child labour in many middle income countries and may also
explain lower incidences of child labour in poor states such as Kerala compared
to affluent states of Gujarat and Punjab in India.35
It must also be pointed out that similar poverty levels may produce different
outcomes for child labour and schooling. e.g, two states in India – Kerala and
Uttar Pradesh (UP) – despite showing similar economic growth, have shown
diverse pattern vis-à-vis child labour as well as educational attainments of
children. Compared to 98 percent school attendance of 12-14 years rural girls
in Kerala, only 32 percent of rural girls attend school in UP. Here, social and
cultural factors as well as the literacy levels of the parents have been cited
as factors influencing incidences of child labour.36
Studies have also documented a negative correlation between child labour
rates and adult literacy levels. Ray (2000) points out that all countries in South
Asia including India show a positive correlation between rising adult education
and children’s schooling, although such correlation is weakest in Bangladesh.37
The model developed by Grootaert (1998) based on his study of Côte d’ Ivoire
has identified certain factors which affect a household’s decision to choose
between child labour and schooling. For example, children from parents with
no or low education are more likely to work and this effect is stronger for
younger children and in rural areas. Besides, father’s education and the
mother’s employment contribute to increasing a child’s probability of going to
school and not working, particularly in urban areas. In addition, the age and
the gender of the child play an important role. For example, in urban areas
girls are less likely to attend school exclusively, combine work and school
relative to working only, and are more likely to be involved in home care
activities. In rural areas, a female head of household would further increase
the odds that a child will work. Apart from these factors, “the poverty status
of the household matters the most in the decision between the work-only
option and the work-school combinations”.38
Overall, poverty, lack of education and child labour reinforce each other
because “child labour excludes or restricts access to education and jeopardises
the chances of upward social mobility, it perpetuates poverty since lack of
education impacts on earnings throughout life [as] it depreciates the human
capital needed for economic and social development”.39
Based on the above discussion, it can be said that the linkages between child
labour, education and schooling, and poverty are significant and that child
work largely comes at the expense of schooling. Thus, any positive policy
intervention to alleviate the issue of child labour should look at these inter-
linkages in totality.
Labour Market Failure
A growing body of literature point to the fact that child labour is directly
related to structure of the labour markets. The supply of the child labour is
determined by labour market and the wage structure for adult and child
worker and ultimately determines the contribution of child labour to the
household income.
Child Labour in South Asia M 19

In a competitive market where wages
are flexible, child labour can easily
substitute adult labour in the labour
market and this may encourage child
labour.
It has been argued that prevalence of
child labour reduces household
income as it keeps adult wages
depressed and contributes to high
rates of adult unemployment. Hence a
ban on child labour would raise
adult wages and households’ income
and enable them to send their
children to schools.
20 M Child Labour in South Asia
According to Cain, Mozumdar and Alam (1980), in a competitive market where
wages are flexible, child labour can easily substitute adult labour in the labour
market and this may encourage child labour. However, in case the wages are
not flexible due to minimum wage and similar legislation, given the higher
productivity of adult workers, child worker may not be a welcome proposition
for the labour market.
Certain studies such as those by Bequele & Boyden (1988) and Jomo (1992)
also point to a wage differential between adult and child worker, thus
perpetuating child labour. It has also been pointed out that monopolistic
demand conditions arising out of concentrated ownership of land, credit and
product monopoly, share cropping arrangements, restrictions of the mobility
of labour and lack of alternative job opportunities also keep the wages of child
labour very low. Since child labour is prone to lower mobility and lack of
alternative jobs, the wage becomes a function of the elasticity of supply.
The studies by Levy (1985) on Egypt and Rosenzweig on India (1981) points
out that children’s labour supply is elastic with respect to their wages or the
own-wage elasticity of child labour is positive and higher for younger children.
However, the cross-wage elasticity with the labour supply of the mother was
found to be negative which implies that an increase in mother’s wage would
reduce the participation of female children in the workforce. In case of men’s
wages, the opposite hold true as it has a cross-wage elasticity of 1 in case of
boys and zero in case of girls.40
Ilahi, Orazem and Sedlacek’s (2000) Brazilian case study on the relationship
between child labour and future adult earnings and poverty status, point out
that entry in the workforce before age 13 results in a reduction in adult wages
of 13-17 percent and an increase in the probability of being in the lowest two
income quintiles of 7-8 percent. According to them, policies which delay age
of entry into the labour market may have significant impact on adult incidence
of poverty. Besides, although child labour reduces the productivity of schooling,
even if the child works while in school, the net effect of an additional year
of schooling on adult wages would be positive. Therefore, policies which delay
school drop-out rates even in cases of working children would be effective at
mitigating adult poverty. The findings support the theoretical argument of
Baland and Robinson (2000) that restricting child labour would be welfare
improving.41
It has been argued that prevalence of child labour reduces household income
as it keeps adult wages depressed and contributes to high rates of adult
unemployment. Hence a ban on child labour would raise adult wages and
households’ income and enable them to send their children to schools. However,
according to Khan et al (forthcoming), given the excessive supply of labour,
a large-scale withdrawal of child labour would not have any impact on the
adult wages. Thus, “from the point of view of child welfare, it may be easier
to approach the issue with a set of policies that eradicate work hazards,
encourage schooling along with work on raising household income of the
poor.”42
The model developed by Basu and Van (1998) theoretically analyses the
phenomenon of child labour in the household decision-making context and
argues that child labour is a facet of low adult wages in the labour market
and consequent poverty. They postulate a negative correlation between child
work and parent’s income and argue that a child’s “non-work is a luxury good

If application of minimum age results
in more adult unemployment, children
will continue to be employed and in
fact may increase the incidences of
child labour.
Putting children to work may
augment current income but may
undermine their human capital
development and parents’ failure to
“internalise the trade-off between
child labour and earning ability”
would result in the child labour to
persist.
in the household consumption in the sense that a poor household cannot
afford to consume this good but it does so as soon as the household income
rises sufficiently.”43 Further, they argue that labour market may be
characterised by multiple equilibria – one where wages are low and children
work (bad equilibrium) and another where wages are high and children do
not work (good equilibrium). In the labour market, child labour can substitute
adult labour despite being only fractionally as productive as an adult which
in turn drives down adult wages and thereby further reinforces child labour.
According to Basu (1999), improvement in the conditions of adult workers in
the labour market can result in the decline of child labour. “If we adopt
policies which raise the marginal productivity of adult workers, thereby raising
wages and employment, all is well.” In contrast, if this is done through the
application of minimum wage legislation, its effects can be varied on the
incidences of child labour. If application of minimum age results in more adult
unemployment, children will continue to be employed and in fact may increase
the incidences of child labour. This will further cause in losses in adult
employment and lead to “further additions to the supply of child labour.”44
The Swinnerton and Rogers’s (1999) model has introduced heterogeneity in
the Basu-Van model by making a distinction between adult wages and adult
income as the latter may come from wages as well as profits. According to
them, if the economy continues to be good, it is unlikely that the profit
earning household would send their children to work. The model thus accounts
for dual possible outcome in a single labour market.45
In sum, these theories’ main argument for the prevalence of child labour rests
on the centrality of the labour market failures, arising out of wage differential
between child and adult labour and low adult wages.
Capital Market Failure
The capital market imperfections are cited as significant determinant of child
labour in theories developed by various scholars.
Baland and Robinson (2000) argue that there is a trade-off between child
labour (current income) and accumulation of human capital through education
(future income). Accordingly, child labour is inefficient when it impairs the
future earning ability of a child. Putting children to work may augment
current income but may undermine their human capital development and
parents’ failure to “internalise the trade-off between child labour and earning
ability” would result in the child labour to persist.46
Further, based on the inter-generational flow of wealth theory, Baland and
Robinson argue that child labour can be Pareto-inefficient even when parents
are fully altruistic towards their children and may persist “either when parents
leave their children no bequests or when capital markets are imperfect.”
According to them, child labour is inefficient when it is used by parents to
transfer income from children to parents (negative bequest) or used as a
substitute for borrowing due to capital market imperfections (transferring of
income from future to the present). “Child labour is inefficient when the
family is so poor that parents do not leave bequests to their children. When
bequests are positive, parents completely internalise the adverse impact of
child labour on the future income of their children since, by reducing bequests
accordingly, they can compensate themselves for the current income they lose
Child Labour in South Asia M 21

In situations where children could
borrow and compensate their parents
for reduced child labour, the problem
of child labour could be alleviated.
“In the absence of developed financial
markets, households resort
substantially to child labour in order
to cope with income variability”
which suggests that “policies aimed at
widening households’ access to credit
could be effective in reducing the
extent of child labour.”
22 M Child Labour in South Asia
by not making their children work. Second, even if bequests are interior, child
labour may be inefficiently high because parents face capital market
imperfections which stop their transferring the future reduction in bequest
into the present.” In situations where children could borrow and compensate
their parents for reduced child labour, the problem of child labour could be
alleviated. The model shows that in case of perfect capital markets, transfer
of resources would occur from children to parents and restore efficiency of
resource allocation.47
Similarly, Jafarey and Lahiri (2000) consider the operation of credit market
as an important element in the analysis of child labour since the family that
gets access to easy and low-interest credit may “forgo present consumption
significantly and the decision to send a child to school may not be painful
one.”48
The model developed by Basu et al (1998) points out that child labour is “a
function of returns on schooling (skilled or educated wages), the child wage,
the cost of education and the degree of difficulty in obtaining funds for
education.” The model argues that decision whether a child goes to work or
school is determined by asset distribution across households as well as capital
market imperfections (when borrowing is costlier than lending due to difficulty
in monitoring loans).49
Ranjan, (1999), also has postulated a two-period model in which child labour
arises as the result of non-existence of market for loans against future
earning of children. Ranjan (2001) further developed an overlapping generations
general equilibrium model where inefficient child labour arises due to credit
constraints. It derives a positive relationship between inequality in the
distribution of income and the incidence of child labour and argues that as
long as returns on education are high and the credit markets50 allow sufficient
flexibility to allow parents to borrow for their children’s education, parents
would prefer to send their children to school thereby reducing or eliminating
child labour altogether.51 The finding that poverty compels child work is
consistent with households being chronically poor or else with their being
transiently poor and credit-constrained.
Similarly, Dahejia and Gatti (2002) statistically demonstrate the existence of
an unconditional negative relationship between child labour and credit
availability, even after controlling for wide range of variables such as GDP per
capita, urbanisation, schooling, fertility, inequality, etc. Hence, they have
argued that “in the absence of developed financial markets, households resort
substantially to child labour in order to cope with income variability” which
suggests that “policies aimed at widening households’ access to credit could be
effective in reducing the extent of child labour.”52
In all the theories discussed above, fertility, education, labour market, adult
wages, capital market, availability of credit have been underlined as one of
the explanations of the child labour situations, poverty has remained the
underlying and most fundamental explanations of child labour. Poverty
explanations of the child labour situations are also predominant in countries
of the South Asia region which records one of the highest cases of child labour
practices in the world, as discussed below.
Child Labour in South Asia M 23
 III
Global Estimates on Child Labour

The new global estimates on child labour put the number of economically
active children ages 5 to 17 years at 352 million which is 23 percent of their
total population. The child labour constitutes nearly 70 percent (245 million)
of the economically active children. On average, more boys tend to work as
child labour than girls although between age groups 5-14, there is no substantial
gender difference (Table 3).

Table 3: Global Estimates on Children in Economic Activity, Child Labour, and

Hazardous Work by Age Group & Gender 2000

Gender and Economically Child Child Labour Children in CHW CHW as Work Ratio
Age Group Active Labour as percent Hazardous as percent percent
Children (‘000s) of EAC Work of EAC of child
(EAC) (‘000s) (CHW) (‘000s) labour

Total 5-14 210,800 186,300 88.4 111,300 52.8 59.7 17.6

Boys 109,000 97,800 89.7 61,300 56.2 62.7 17.7
Girls 101,800 88,500 86.9 50,000 49.1 56.5 17.5
Total 15-17 140,900 59,200 42.0 59,200 42.0 100 42.4
Boys 75,100 34,400 45.8 34,400 45.8 100 44.1
Girls 65,800 24,800 37.7 24,800 37.7 100 40.7
Total (5-17) 351,700 245,500 69.8 170,500 48.5 69.5 23.0
Boys 184,100 132,200 71.8 95,700 52.0 72.4 23.4
Girls 167,600 113,300 67.6 74,800 44.6 66.0 22.5
Source: ILO-IPEC-SIMPOC , Every Child Counts: New Global Estimates on Child Labour, Geneva, International
Labour Office, 2000.

Among the developing regions, South
Asia region54 accounts for the largest
concentration of child labour and of
children not attending school. A
conservative estimate puts the number
of such children (5-14 years) between
20-30 million in five countries of
South Asia.
However, the data about girl child labour is often underestimated as it does
not take into account the activities in the household enterprises and unpaid
economic activity around the household. Participation rates of children are
higher in rural areas than in urban centres and most of the working children
are found in the developing regions of the world where one out of every four
child in the age group 5-14 is a working child.53
History of Child Labour in South Asia: An Overview
Among the developing regions, South Asia region54 accounts for the largest
concentration of child labour and of children not attending school. The region
thus has become a focus of the international campaign to eliminate child
labour. These children work either in a family business, outside home or
employed as wage earner. A conservative estimate puts the number of such
children (5-14 years) between 20-30 million in five countries of South Asia.55
The South Asian Coalition on Child Servitude (SACCS) however estimates

24 M Child Labour in South Asia

that there are more than 80 million working children in South Asia under 14
(55 million in India, 10 million in Pakistan, 8 million in Nepal, 7 million each
in Bangladesh and Sri Lanka). On an average, percentage of working children/
economically active children in the age group 5-14 years varies between 5-42
percent in five major countries of South Asia (Bangladesh: 19.1 percent, India:
5.4 percent, Nepal: 41.7 percent, Pakistan: 8.3.56 In Sri Lanka about 21
percent of children in the age group 5-17 are engaged in some form of
economic activity although children engaged in economic activity alone are 7.5
percent) (Table 5). 57

Chart1: Number of Child Labour in South Asia 1995

16000
14802

14000

12000
Child Labour (in '000)

10000

8000

6000 5368

4000
2835

2000 1200
48
0
Bangladesh India Nepal Pakistan Sri Lanka

Source: Based on ILO Database on Economically Active Population 1998.

Since the 1980s, the percentage of children (10-14 years) in the labour force
has declined in all countries of the region, although the rate of decline varies
between the countries of South Asia (Table 4).

Table 4: Percentage of 10-14 age group Children in the Labour

Force in South Asia 1980-99
1980 1990 1995 1996 1998 1999
Bangladesh 35 33 30 30 29 29
India 21 17 14 14 13 13
Nepal 56 48 45 45 43 43
Pakistan 23 20 18 17 16 16
Sri Lanka 4 - - 2 2 2
South Asia 23 - - 17 16 16
Note: Percentage figures have been rounded up to the nearest whole number.
Source: World Development Indicators 2000 and World Development Indicators
1998, Washington: World Bank, pp 46-48 & pp 50-52.

According to the ILO database on economically active population, child labour

(10-14 years) as a percentage of total workforce for countries in South Asia
in 1995 ranged between 0.6 to 12 percent (Bangladesh: 9.17, India: 3.68,
Nepal: 12.12, Pakistan: 5.73 and Sri Lanka: 0.64). The projected estimate for

Child Labour in South Asia M 25

 years 2000 and 2010 puts the figures as follows: Bangladesh: 7.15 and 4.08,
India: 2.95 and 1.51, Nepal: 11.30 and 8.86, Pakistan: 5.12 and 3.02 and Sri
Lanka: 0.42 and 0.00 (Table 5).58 The children’s involvement in the total
labour force is thus projected to decline. These projections are corroborated
by actual fall in the percentage of children in the labour force, as discussed
above (Table 4).

Table 5: Economically Active Children and Child Labour in total

Workforce in Countries of South Asia
Percent of Child labour as Child labour as Child labour as
Working/ percentage of percentage of percentage of
Economically total workers total workers total workers
Active Children* 1995 2000** 2010**
Bangladesh 19.1 9.17 7.15 4.08
India 5.4 3.68 2.95 1.51
Nepal 41.7 12.12 11.30 8.86
Pakistan 8.3 5.73 5.12 3.02
Sri Lanka 7.5 0.64 0.42 0.00
*
Based on country-level ILO survey in the mid 1990s. The age group expect for Sri Lanka is 5-14 years. For Sri
Lanka it is 5-17 years.
**
ILO projections.
Source: R Castle, D P Chaudhri and C Nyland, ‘Child Labour in South Asia: Domestic and International Initiatives
(Including ILO and WTO’s)’ in Proceedings of the National Seminar on Child Labour: Realities and Policy Dimensions,
New Delhi, 5-7 December 2000 (organised by V V Giri National Labour Institute, Indian Society of Labour
Economics and Institute for Human Development).

Based on the ILO data on labour force participation for the years 1950-1995
and projections for the year 2010, Castle, Chaudhri and Nyland (2000) have
given an overview of the child labour situation in South Asia over a period
of time. According to them, although the latest ILO world estimates on child
labour indicate that the problem has intensified, “it is largely a statistical
illusion.” The increase, they argue is due to better survey methods with a
larger focus on the informal sector as well as girl and unpaid child workers.
The section below discusses the overall child labour situation in South Asia.

Amongst the countries of South Asia,
Sri Lanka in 1995 recorded the best
figures in terms of high proportion of
children in school education as well
as a low percentage in child labour
compared to other countries of the
region.
A look at the index of total child labour (10-14 years of age) in South Asia
with 1970 as base year shows that in the years 1950 and 1960, Sri Lanka had
a higher child labour index compared with all other countries of the region.
In the year 1995, the same figure had declined to become the lowest amongst
the countries of South Asia. This year also saw a marginal decline in the index
of child labour for India whereas the other 3 countries (Bangladesh, Nepal and
Pakistan) recorded an increase in the child labour index. Projecting this trend
into the future indicates that by the year 2010, Sri Lanka would reach zero
on the child labour index. All other countries would also show a varying
degree of decline, except Nepal (Table 6).

Amongst the countries of South Asia, Sri Lanka in 1995 recorded the best
figures in terms of high proportion of children in school education as well as
a low percentage in child labour compared to other countries of the region.
The percentage of child labour in India 4.6 percent, 10.1 percent in Bangladesh
while it was 5.3 percent in the case of Pakistan and 13 percent for Nepal
(Table 7).

26 M Child Labour in South Asia

 Table 6: Index of Child Labour in the Countries of South Asia (1970=100)
Country 1950 1960 1970 1980 1990 1995 2000 2010
Bangladesh 67.74 76.26 100.00 114.98 124.50 157.67 142.36 101.06
India 86.75 87.49 100.00 104.75 92.63 90.26 80.23 49.55
Nepal 79.98 84.27 100.00 111.44 127.53 143.03 152.21 155.54
Pakistan 60.47 68.91 100.00 121.45 134.12 134.55 142.05 117.70
Sri Lanka 114.61 107.87 100.00 74.16 58.43 53.93 39.33 0.00
Source: R Castle, D P Chaudhri and C Nyland, ‘Child Labour in South Asia: Domestic and International
Initiatives (Including ILO and WTO’s)’ in Proceedings of the National Seminar on Child Labour: Realities and
Policy Dimensions, New Delhi, 5-7 December 2000 (organised by V V Giri National Labour Institute, Indian
Society of Labour Economics and Institute for Human Development).

Table 7: Child Population, Child Labour, School Education and Nowhere

Children* in South Asia 1995
Country Total Students Child Pre-School Nowhere
Children (percent) Labour Age Children
(’000) (percent) (percent) (percent)
Bangladesh 53,071 37.7 10.1 29.7 22.5
India 3,20,600 43.8 4.6 36.1 15.5
Nepal 9,206 40.7 13.0 29.7 16.6
Pakistan 53,612 24.4 5.3 36.8 33.6
Sri Lanka 6,375 52.3 0.8 40.5 6.4
*
The term refers to children neither in the education system nor the workforce; children involved in household,
non-economic activates that are not classified as child labour.
Note: Child population and child labour figures are for the age-group 10-14 years, those of school students
for the age group 5-14, pre-school children, 0-4 years.
Source: R Castle, D P Chaudhri and C Nyland, ‘Child Labour in South Asia: Domestic and International
Initiatives (Including ILO and WTO’s)’ in Proceedings of the National Seminar on Child Labour: Realities and
Policy Dimensions, New Delhi, 5-7 December 2000 (organised by V V Giri National Labour Institute, Indian
Society of Labour Economics and Institute for Human Development).

As estimates on child labour vary considerably between agencies,59 the country-

wise estimates on child labour are discussed below. The section also discusses
the magnitude of child labour in the export industries of different countries
and the region-specific causes (drawn from country-level surveys and studies)
for child labour which shows that children in the export sector constitute only
a tiny minority compared to those found in the informal and domestic sector
of the economy.

Child Labour in Bangladesh

The UNICEF Report of 1999 found that 6.3 million children under 14 years
of age are working in Bangladesh. According to the Bangladesh Bureau of
Statistics’ (BBS) National Sample Survey of Child Labour in Bangladesh, there
were 6.6 million economically active children in Bangladesh in 1995-96 in the
age group 5-14 years. About 19 percent of the total child population in this
age group was found to be economic active (Table 8). Approximately, 83
percent of the child labourers worked in rural areas while only 17 percent

Child Labour in South Asia M 27


In Bangladesh children are found
working in garment factories,
bakeries and confectionaries, hotels
and restaurants, transport, bidi
factories, small engineering
workshops, fish processing and other
informal and unregulated sectors.
Nearly all the child labour in export
industry was found in the garment
factory. The estimate by the
Bangladesh Institute of Development
Studies put the number of child
worker in the garment industry at
80,000 in 1992.
28 M Child Labour in South Asia
were employed in urban areas. Amongst the economically active children,
about 60 percent are male while 40 percent are females. Out of the total
population of child labour, 11.6 percent were in the age group 5-9 years but
the majority (88.4 percent) belonged to the age group 10-14 years. Agricultural
activities employed the majority of child workers (65.4 percent). Other activities,
including household work accounted for 14.3 percent of the working children
while other services accounted for 10.3 percent of the child labourers, followed
by manufacturing (8.2 percent) and transport and communication (1.8 percent).
In the household work, children work with either no salary or very low salary
which is less than US $ 2.50 per month.60
Table 8: Economically Active Children
(5-14 years) in Bangladesh 1995/1996
Child Economically Economically
Population Active Active
(’000) Children Children
(’000) (percent)
Total 34,455 6,548 19.1
Male 17,862 3,919 21.94
Female 16,593 2,665 16.06
Source: Report of National Sample Survey of Child Labour in Bangladesh 1995-
96, Dhaka: Bangladesh Bureau of Statistics, 1996.
According to the Bangladesh Ministry of Labour, children are found working
in garment factories, bakeries and confectionaries, hotels and restaurants,
transport, bidi factories, small engineering workshops, fish processing and
other informal and unregulated sectors. Children work in nearly all sectors
of economy nearing 200 types of activities out of which 49 are considered to
be harmful to the health and well-being of children. They are also employed
in domestic services, tea houses and tea shops, ship-dismantling, brick-making
and brick-breaking for road fill, tourism, and as labourers on building sites.
There is extensive trafficking in both women and children, within the country
and overseas (primarily to India, Pakistan), often for prostitution and at times
for forced labour. Some children are also trafficked to the Middle East to be
used as camel jockeys.61 UNICEF has estimated that there are about 10,000
child prostitutes in the country. Other estimates have been put the figure as
high as 29,000.
Child Labour in Export Sector
Estimates differ considerably on the number of children employed by the
garment industry prior to 1995. Thousands of children were allegedly employed
by the garment industry, a major foreign currency earner (US $ 1.2 billion
annually from exports to the US alone). Nearly all the child labour in export
industry was found in the garment factory. The estimate by the Bangladesh
Institute of Development Studies put the number of child worker in the
garment industry at 80,000 in 1992. According to Paul-Majumder and Zohir
(1992), until mid-nineties, the formal sector of the garment industry accounted
for the highest number of child labour constituting nearly 13 percent of the
labour force. The Bangladesh Garment Manufacturers and Exporters
Association (BGMEA) announced in 1994 that child labour constituted only
 one percent of its labour force, thus accounting for approximately 8,000-
10,000 child labours. The 1994 study by Asian-American Free Labour Institute
(AAFLI) estimated the number of child workers in garment factories in the
range of 25-30,000 children.62 A joint survey by the ILO, UNICEF and BGMEA
found that in 1995, 2,100 garment factories employed nearly 10,547 children
below 14.63 Compared to the overall number of child labour in Bangladesh,
only a small proportion is employed in the export sector (as is the case in other
countries of the region).

Child Labour in India

India has the largest number of working children in South Asia, a function
of its size and population. Estimates on child workers vary between 44 million
to over 100 million child workers amongst various organisations. The survey
carried out by the Operations Research Group, Baroda (ORGB) in 1983 on
40,000 sample households has put the number of child workers at 44 million
which is considered to be a realistic estimate. The ORGB 1993 update estimate
the number to go up to 70 million in the year 2000.

Table 9: Working Children (5-14 years) in India 1991

Child Working Working
Population Children* Children
(percent)
All Children 209,986,630 11,285,349 5.37
Male 109,366,794 6,189,834 5.66
Female 100,619,836 5,095,515 5.06
Urban Total 50,553,202 1,032,149 2.04
Urban Male 26,228,333 732,783 2.79
Urban Female 24,324,869 299,366 1.23
Rural Total 159,433,428 10,253,200 6.43
Rural Male 83,138,461 5,457,051 6.56
Rural Female 76,294,967 4,796,149 6.29
* Including Main and Marginal Workers
Source: Census of India 1991, New Delhi: Census Commissioner of India, n.d.

The NSS 55th round (1999-2000) has
estimated the number of working
children at 10.4 million while the
43rd Round NSS conducted in 1987-
1988 had estimated 17.5 million
working children. As per these
estimates, there is a progressive
decline in the number of working
children.
According to the census figures of 1981, the total number of working children
in India was 13.6 million which came down to 11.28 million according to the
1991 census (Table 9). The NSS 55th round (1999-2000) has estimated the
number of working children at 10.4 million while the 43rd Round NSS conducted
in 1987-1988 had estimated 17.5 million working children. As per these
estimates, there is a progressive decline in the number of working children.64
In 1981, children constituted 6 percent of the total labour forces but in 1991,
they constituted 3.59 percent of the total labour force. Likewise, in 1981 the
number of working children was 13.6 million compared to 11.28 million in
1991. Amongst the states, Andhra Pradesh has the highest number of working
children at 1.66 million. Besides, Madhya Pradesh, Maharashtra and Uttar
Pradesh have more than one million working children. Majority of children
are engaged in rural areas, in agricultural and allied activities including
cultivation, livestock, forestry and fisheries.65

Child Labour in South Asia M 29


According to the ILO estimates, the
number of child workers in India is
about 44 million, while some NGOs
put the current figure at 55 million.
The carpet industies are primarily
located in poorest region of India,
mainly to take advantage of easy
child labour supply.
30 M Child Labour in South Asia
Although the census data gives an optimistic picture, other independent
studies conducted on the estimates of child labour in India have come up with
differing estimates on child labour. According to the ILO estimates, the number
of child workers in India is about 44 million, while some NGOs put the current
figure at 55 million. It has also been pointed out that there are about 87 to
105 million children who do not attend school and are involved in housework,
work on family farms or work alongside their parents as paid agricultural
labourers, work as domestic servants, or otherwise are employed. The working
conditions of domestic child servants often equates with bonded labour as
most of them are sent to work because their parents cannot afford to feed
them, or to pay off a debt incurred by the parent or family member.66
As far as sector-wise distribution of child labour is concerned, agricultural
activities account for the lion’s share of the child labour in India: 35 percent
of children are cultivators while 43 percent are agricultural labourers.
Manufacturing, processing, servicing and repairs employ 0.9 percent of the
child labour while 2 percent of the children work in the transport, storage and
communications sector. Other activities employ 10 percent of the child
workers.67
Child labour is particularly widespread in industries such as hand-knotted
carpets; gemstone polishing; leather; and sporting goods. Children are also
involved in a number of other industries such as locks, leather, pottery,
granite, mica, slate mining and quarrying, auto parts and accessories, processing
of cashew, coir products, iron and steel goods, furniture, garments, shrimp
and seafood processing, etc.
Forced/bonded child labour is also reported from various parts of the country
although the number is not very significant. Industries that involve forced or
indentured child labour are considered to be brassware, hand-knotted wool
carpets, explosive fireworks, footwear, hand-blown glass bangles, hand-made
locks, hand-dipped matches, hand-broken quarried stones, hand-spun silk
thread and hand-loomed silk cloth, hand-made bricks, and bidis. A number
of these industries also expose children to hazardous working conditions.68
Child Labour in Export Sector
Major export industries that employ child labour are hand-knotted carpets,
gemstone polishing, brassware and metal articles, glass and glassware,
footwear, textiles and silks and fireworks.
India exports a large proportion of its hand-knotted carpet to the US and
Germany. In 1993, the carpet exports to the US accounted for US $ 170
million. The carpet industries are primarily located in Jammu and Kashmir
and eastern UP (Bhadohi, Mirzapur and Varanasi) and has gradually spread
to Allahabad and Koshambi, again in UP, outskirts of Jaipur in Rajasthan,
Garhwa and Samastipur in Bihar, primarily to take advantage of easy child
labour supply from Orissa and Bihar – some of the poorest states in India.
The children are involved in the whole process of carpet production including
sorting, knotting, weaving, cutting, washing and dyeing. They may be either
be working in a family looms, or alongside adult family member, or as
apprentices (starting as young as 6) – all unpaid or as wage earner.69
Human rights organisations estimate that the carpet industry alone accounts
for nearly 300,000 working children working, many of them under conditions

Many children who work in carpet
industry are sold into debt bondage
against loan or lured into the work
by promise of better earnings after
making an initial payment to
parents.
Another industry known to employ
child labour with some export
potential is the bidi industry. Of the
total exports of Rs. 24 crores in 1997-
98, the United Arab Emirates was the
largest market (worth Rs. 13.8 crores)
followed by the US (worth Rs. 2.3
crores).
that amount to bonded labour.70 According to the American Embassy in New
Delhi, in 1992 the number of child workers in the carpet industry was around
300,000 to 400,000. The 1992 study carried out by the National Council for
Applied Economic Research (NCAER), New Delhi estimated that child labour
constitute 8 percent of the total labour force in the carpet industry71 out of
which 55 percent worked as part of family labour and the remaining 45
percent as hired labour. Many children who work in carpet industry are sold
into debt bondage against loan or lured into the work by promise of better
earnings after making an initial payment to parents (sum ranging between
Rs. 1,500-2,000 amounting to US $ 50-60). The ILO-CORT study (1998)
estimated that as many as 130,000 children were engaged in the carpet
industry in India.72
In 1993, the gem polishing industry exported more than US $ 1 billion gems,
mostly diamonds. The US again is the largest market. The diamond polishing
factories are located in Surat, Gujarat, and estimates on child labour in this
industry range from 6,000-100,000. The gem polishing work based in Jaipur,
Rajasthan, employs an estimated number of 7,000 to 13,000 child workers.
Brassware and metal article industry based in Moradabad in UP another
export oriented industry, organised into a number of household units, and
thus unregulated, employs a significant a number of child labour in its workforce.
According to Neera Burra’s study of 1989, approximately 40,000 to 45,000
children work in this industry, almost all of whom work as wage labourers
and are unrelated to workshop owners, mostly recruited by contractors or
agent for a commission.
Glassware industry exported goods valued more than US $ 2 million to the
US in 1992. Located in Ferozabad district of UP, it is estimated that the
number of child workers in this industry is in the range of 8,000 to 50,000.
An estimated number of 25,000 child workers is also known to work in the
footwear industry, based in the Agra area, exporting more than US $ 107
million of footwear to the US in 1993.
Silk exports to the US and European countries constitute another important
product in India’s export basket. Here again children are involved in various
stages of silk production including sericulture, spinning weaving, dyeing,
washing, etc. It is estimated that around 5,000 children work in the silk
industry in southern Karnataka. In a study conducted on the sample of 250
child worker in Bhagalpur, it was found that majority of child workers came
from minority Muslim community or other disadvantaged groups.73
Another industry known to employ child labour with some export potential
is the bidi industry. Of the total exports of Rs. 24 crores in 1997-98, the
United Arab Emirates was the largest market (worth Rs. 13.8 crores) followed
by the US (worth Rs. 2.3 crores). For the Government of India, the bidi
industry is an important source of revenue which in 1999 fetched US$ 165
million in excise (from domestic markets) and US$ 200 million in foreign
exchange.
Bidi industry is a predominantly home-based industry as only 10 percent of
bidis are made in regular factories and is reported to involve a number of
child workers. According to the 51st round of the National Sample Survey
1994-1995, child workers in the bidi industry belong to any of the three
categories - hired child workers, paid and unpaid household child workers.
Child Labour in South Asia M 31

According to a WHO paper Children
and Tobacco, India’s bidi economy
provides employment for 40 million
men and boys and another 60 million
people, mostly women and children.
The International Confederation of
Free Trade Unions, Asia-Pacific
Regional Office report in 1993
estimated that there are 3 million
working children in Nepal. Other
estimates have revealed that 24.8
percent of the children aged 10-14
years are economically active in
Nepal in 1995.
32 M Child Labour in South Asia
The NSS noted that an estimated number of 330 hired child workers per
thousand are hired workers. Paid household child workers numbered 669 per
thousand paid employees in the household category. Of every 1,000 unpaid
household workers, the number of children is 209. Overall, about 50 percent
of the workers are household workers and women and children undertake
bidi-making as part of household activity. The survey also indicated that the
proportion of child workers is highest among the paid household workers.
Given the home-based nature of the industry, bonded child labour in bidi
industry is non-existent claims Margaret Antony, an independent researcher
on the tobacco industry. According to a WHO paper Children and Tobacco,
India’s bidi economy provides employment for 40 million men and boys and
another 60 million people, mostly women and children. Additionally, the bidi
industry also provides employment to farmers who grow the special tobacco
and to people who are engaged in its marketing and distribution.74
Although not an exporting industry, fireworks and match-making industry in
Sivakasi produces 90 percent of the fireworks (meant for domestic consumption
during Diwali) and is known to employ between 30,000 to 70,000 child workers,
according to SACCS. In the match industry (producing 55 percent of matches
in India), nearly 55 percent of the workers are child workers (below 14 and
many as young as five). Between the fireworks and match industry (in
Siwakasi and Sivakasi-Satuur belt), the number of child workers is in the
range of 50,000 to 100,000.75
Child Labour in Nepal
The International Confederation of Free Trade Unions, Asia-Pacific Regional
Office report in 1993 estimated that there are 3 million working children in
Nepal. Other estimates have revealed that 24.8 percent of the children aged
10-14 years are economically active in Nepal in 1995 (CBS Census, 1995). This
figure was even higher in 1981. According to the 1995/96 Migration and
Employment Survey, there are 2.6 million working children in Nepal in the
age group 5-14 years with a work participation rate at 41.7 percent. The work
participation rate for boys is 36.1 percent and higher (47.6 percent) for girls
as the girls are very often employed in non-economic activities such as
domestic and household chores (Table 10). The economic participation rate is
27.9 percent for boys and 25.5 percent for girls. The incidence of child labour
amongst 10-14 years children is three times higher (at 40.8 percent) than that
in children in 5-9 years age group. Nearly, 1.7 million (5-14 years) participate
in economic activities which constitute 26.7 percent of the total children in the
country. The rural children work participation rate is 43.4 percent which is
twice the level of urban children (23 percent). Urban economic participation
rate is much lower (8.5 percent; 9.7 percent boys and 7.2 percent girls)
compared to rural estimates at 28.4 (29.6 percent boys and 27.1 percent girls).
The mountain region shows the highest work participation rate (52.2 percent)
which is lowest in the Tarai region (36.6 percent). The work participation rate
among female children is higher in all ecological zones and developmental
regions. However, incidences of child labour are higher among male compared
to the female children in all the developmental regions of Nepal except in the
far-western region.
Majority of economically active children are engaged in agricultural activities
(94.7 percent) and only 5.3 percent in non-agricultural activities. The survey
revealed that within the non-agricultural activity, 1.62 percent economically
active children are service workers and 1.6 percent are involved in construction,

Approximately 60 percent of working
children also attend school. Amongst
boys 70 to 75 percent work and also
go to school, while only 50 to 60
percent of girls who work attend
school.
transportation and communication activities. Another 0.8 percent each worked
as technical workers and production workers and 0.4 percent worked as sales
workers.
Table 10: Economically Active Children (5-14 Years) in
Nepal 1995/96
Child Economic Economically
Population Active Active
Children Children
(percent)
All Children 6,225,000 2,596,000 41.7
Male 3,202,000 1,156,000 36.1
Female 3,024,000 1,439,000 47.6
Source: Bhim Raj Suwal, Bal Kumar KC and Keshab Prasad Adhikari, Child
Labour Situation in Nepal: Report From Migration and Employment Survey,
1995/96, Kathmandu: Central Department of Population Studies, Tribhuvan
University, 1997.
The older and urban children tend to be more involved with the non-
agricultural work. The non-agricultural households show lower work
participation rate amongst children. Economic participation rate of children
also decreases with a household occupational shift from agricultural to non-
agricultural activities. Besides, work participation rate of children tends to
decrease as the size of the family increases. No direct correlation exists
between work participation rate of children and the size of household
landholdings although economic participation rate increases with increase in
the size of the household landholding.76
Approximately 60 percent of working children also attend school. Amongst
boys 70 to 75 percent work and also go to school, while only 50 to 60 percent
of girls who work attend school. Children are economically active in some
small-scale and cottage industries (carpet weaving, pottery, basket weaving,
sewing, candle making ironsmithing), rag picking, brick and tile works, quarries,
coal mines, match factories, auto repair shops, and agricultural activities such
as livestock rearing, planting, harvesting, ploughing, fishing, etc. A small
number of children are employed in bars and restaurants and as domestics
and porters. Reports also suggest that the Maoists insurgents often use
children, including girls, as soldiers, shields, runners, and messengers.
Child Labour in Export Sector
The Nepali carpet industry is the largest employer and foreign exchange
earner in the country. During 1992, carpet goods worth US$ 17 millions were
exported to the US. The carpet industry’s value grew to US$ 160 million
annually until 1995, which is a third of the total Nepali annual budget. It is
classified as a cottage industry and is thus exempt from tax and is prone to
lax labour laws which perpetuate the employment of children in the carpet
industry. It employs a large number of child labourers, working as wool
spinners and weavers; some also dye and wash carpets.
The child labour estimates in the carpet industry in Nepal vary between
official figures of 0.8 percent to 50 percent by the NGOs. A survey conducted
by Government of Nepal on 23 carpet units estimated that 9 percent of the
Child Labour in South Asia M 33
 labour force was constituted of child labour. The Child Workers in Nepal
Concerned Centre (CWIN) study of 1992 however, put this figure at 50
percent and 150,000 children in nearly 2000 carpet factories. Majority of the
children were between 11 and 14 years of age and 7.8 percent were below
10 years of age. According to AAFLI’s survey on 17 carpet factories, 30
percent of the workers were found to be less than 14 years of age.

The amount paid to the family for
taking children to work in the carpet
industry ranges between US$ 40-100.
The children are paid a flat rate of
Nepali Rupees 350-750 per month (US$
7.95-17).
Most of these child labourers are migrants from the rural areas, 47 percent
of whom are brought by brokers, the rest by relatives. The amount paid to
the family for taking children to work in the carpet industry ranges between
US$ 40-100. This is the only income that the family receives for the child’s
work as very few children were known to send money back to their families
later. The children are paid a flat rate of Nepali Rupees 350-750 per month
(US$ 7.95-17). According to CWIN, 7-8 percent of the child labourers work to
repay debt incurred by their parents, which often is a pittance: Nepali Rupees
100-15,000 (US$ 2.50-US$375).77

Another large export earner in Nepal is the tea industry. Here again, it has
been estimated that children form 10 percent workforce in this industry, of
which 20 percent are the sole earner of the family.78

Child Labour in Pakistan

According to UNICEF, in the year 1990 there were 8 million working children.
Nearly 19 percent of children (2.3 million) in the age group 10-14 worked as
estimated by the labour force survey for 1986-87. According to independent
estimates, the figure of child labour in Pakistan is about 19 million. The 1995
report by the Human Rights Commission of Pakistan has estimated the
number of working children in the range of 11 million to 12 million.79

Table 11: Economically Active Children (5-14 Years) in

Pakistan 1996
Child Economically Economically
Population Active Active
Children Children
(percent)
All Children 40,043,700 3,313,420 8.27
Male 20,650,500 2,431,992 11.78
Female 19,393,200 881,428 4.55
Urban 11,341,900 367,745 3.24
Urban Male 5,747,400 321,634 5.60
Urban Female 5,594,500 46,111 0.82
Rural 28,701,800 2,945,675 10.26
Rural Male 14,903,100 2,110,358 14.16
Rural Female 13,798,700 835,317 6.05
Source: Federal Bureau of Statistics, Child Labour Survey, 1996.

According to the 1996 Federal Bureau of Statistics National Child Labour

Survey, in January 1996, Pakistan had about 40 million children aged 5-14
years out of which 3.3 million are economically active constituting nearly 8.3
percent of the total population of children80 (Table 11). Approximately 60
percent of child labour in the country is to be found in Punjab. Boys constitutes

34 M Child Labour in South Asia


Incidences of child labour in the
rural areas are eight times higher
than in the urban areas. One reason
for this could be the involvement of
children in unpaid family farm
activities.
In remote areas of rural Sindh,
bonded agricultural labour and debt
slavery have a long history. According
to human rights groups, about 4,500
bonded labourers were maintained by
landlords in rural Sindh. A 1998
study done by the trade federation
noted that nearly 200,000 families
work in debt slavery in the brick
kiln industry.
nearly 73 percent of the working child (2.4 million) compared to girls who
constitutes 27 percent (0.9 million) of the total incidences of child labour.
Incidences of child labour in the rural areas are eight times higher than in
the urban areas. One reason for this could be the involvement of children in
unpaid family farm activities. Nearly 80 percent of female child workers are
employed in elementary, unskilled occupation. Besides, girl child tend to
concentrate more in the agricultural sector (77 percent) compared to 63
percent boys.
The majority (67 percent) of child labourers work in agriculture, forestry,
hunting, and fishing industries; 11 percent in the manufacturing sector, 9
percent in wholesale and retail, and 8 percent in community, social and
personal services. In occupational terms, craft and related trade work accounted
for approximately 19 percent of child labourers, while 71 percent worked in
unskilled jobs. About 45.8 percent of child labourers worked 35 hours or more
per week and 12.6 percent worked 56 hours or more. It has been observed
that the quantum of child labour increases with age, which means the older
children have higher economic participation rate.81
Like in other countries of South Asia, agriculture is the largest child labour
employer; followed by the informal sector including domestic work, street
vending, and family businesses; and hazardous work, such as the leather,
surgical instruments, and brick kiln industries. According to the president of
the Punjab Labourers Front, nearly 100,000 children between the ages of 5
and 12 years are working in more than 4,500 brick kilns in Punjab. Besides,
children as young as three also work in certain sectors. According to the
Human Rights Commission of Pakistan 1999 survey, approximately 4,000
children (mostly aged 3-8 years) are employed in auto workshops in the
Mardan district of the NWFP.
Pakistan is also a source and conduit for trafficking in women and children
for sexual exploitation, prostitution and for use as bonded labour. In remote
areas of rural Sindh, bonded agricultural labour and debt slavery have a long
history. According to human rights groups, about 4,500 bonded labourers were
maintained by landlords in rural Sindh. A 1998 study done by the trade
federation noted that nearly 200,000 families work in debt slavery in the brick
kiln industry. The carpet industry is also known to use bonded child labour
based on the peshgi system (where worker is advanced money and raw
material for the carpet to be made by him) and is often exploited due to lack
of education and ability to calculate. 82 In carpet weaving sector in particular,
children from illegal immigrant families from Bangladesh and Burma are
involved in debt bondage. Bonded labours usually though not exclusively
belong to the unskilled, low-caste and non-muslim section of the population.
Certain studies indicate that children from all the sections of society are
involved in debt bondage.83 Besides, phenomenon of child soldiers is not
unknown. Although government does not recruit children for this purpose,
some groups such as the Tehrik-e-Nifaze-e-Shariat-Muhammadi have recruited
teenagers to fight alongside the Taliban in Afghanistan.84
Child Labour in Export Sector
Carpet industry constitutes one of the significant foreign exchange earners
for Pakistan. It is primarily a cottage industry, with heavy concentration in
Punjab and Sindh provinces. The carpet industry employs significant number
of children in its workforce. The 1992 UNICEF/Government of Pakistan
survey reported that 90 percent out of the one million workers in the carpet
Child Labour in South Asia M 35

The 1992 UNICEF-Punjab report
estimated that out of 1.5 million
workers in carpet industry, one
million were children. The Punjab
carpet industry has over 80 percent
child workers under 15 including 30
percent under 10 years of age.
The Child Activity survey of 1999 by
the Department of Census and
Statistics estimated that out of the
total child population (5-17 years) of
4,344,770, nearly 21 percent (926,038)
are engaged in some form of economic
activity although the proportion of
children engaged only in economic
activity is 7.5 percent
36 M Child Labour in South Asia
industry are child workers. On the other hand, the 1992 UNICEF-Punjab
report estimated that out of 1.5 million workers in carpet industry, one million
were children. The Punjab carpet industry has over 80 percent child workers
under 15 including 30 percent under 10 years of age. According to the
Pakistan Carpet Manufacturers and Garment Exporters Association
(PCMGEA), an estimated 8 percent children constitute the labour force in the
industry, majority of which is comprised of family unit labour. While 90
percent of the carpet weaving is based in village homes, only 10 percent of
the looms are in factories. Bonded child labour is also known to be prevalent
in the carpet industry.
The surgical instrument also constitutes an export industry of Pakistan,
primarily exporting to the USA from the Sialkot area. There are no
comprehensive estimates on the child labour in this industry. According to
Government of Pakistan estimates in 1993, 3,670 children under 17 are
employed in this industry. The SACCS on the other hand claims that thousands
of children are employed in this sector.
The International Textile, Garment and Leather Federation also maintains
that the industry employs significant number of child workers (10-15 years)
who spend up to eight hours grinding and sanding surgical instrument which
is considered a hazardous work for children.
The sporting goods industry in Pakistan, again in the Sialkot and adjoining
area, is another export industry that uses child labour in its production
process (football stitching, etc.) employing between 20-25 percent of children
(12-15 years) in its labour force. Here again majority of them work in family-
based cottage set ups.85
Child Labour in Sri Lanka
The Child Activity survey of 1999 by the Department of Census and Statistics
estimated that out of the total child population (5-17 years) of 4,344,770,
nearly 21 percent (926,038) are engaged in some form of economic activity
although the proportion of children engaged only in economic activity is 7.5
percent. 62 percent of working children are males. About 26 percent males
(577,410) and 17 percent (348,628) female children are engaged in economic
activities. Nearly 95 percent of all the working children are found in the rural
sectors where 23 percent of the children are engaged in economic activities.
The corresponding figure for the urban areas is 5 and about 9 percent,
respectively. 76.7 percent of all working children (75 percent males and 80
percent females) work as unpaid family workers and this trend is more
common in the rural sector (Table 12).
The proportion of children engaged only in economic activities is 7.5 percent.
A total of 3,418,733 children (i.e. about 79 percent of the total) are not
engaged in any form of economic activity. This figure is slightly misleading as
a number of children are engaged in household activities, which are not
considered to be an economic activity. For instance, 67 percent of non-working
children are engaged in household activities while attending school or
educational institutions.86

One of the most destructive forms of
child labour in Sri Lanka prevails in
the fishing industry. Children are
recruited in the fishing ‘vaadiyas’.
Vaadiyas are very remote and
children are kept in conditions of
virtual slavery.
Table 12: Economically Active Children (5-17 Years) in
Sri Lanka 1999
Child Economically Economically
Population Active Active
Children Children
(percent)
All Children 4,344,770 926,038 21.3
Male 2,238,445 577,410 25.8
Female 2,106,325 348,628 16.6
Urban 551,185 48,433 8.8
Rural 3,793,585 877,604 23.1
Source: Summary Findings Child Activity Survey in Sri Lanka 1999, Department
of Census & Statistics, Ministry of Finance & Planning, 1999.
Similar to the trend in other South Asian countries, nearly 64 percent of
working children are engaged in agricultural activities, followed by
manufacturing (15 percent), trade and hotel (11 percent) and services sector
at 5 percent. The survey found 450,000 children employed by their families
in seasonal agricultural work.
The domestic services are known to employ thousands of children. A 1997
study reported that child domestic servants are employed in 8.6 percent of
homes in the Southern Province. The child labour survey put the percentage
of children working as domestic workers at 2.1 percent. Deprived of educational
opportunities, many of them are subjected to physical, sexual, and emotional
abuse. Children are also employed in the informal sector of economy as well
as in family enterprises such as family farms, crafts, small trade establishments,
restaurants, and repair shops apart from working in manufacture of coconut
fibre products, bricks, fishing, wrapping tobacco, street trading, and farming.
Besides, trafficking in women and children for the purpose of forced labour
and prostitution is widespread. Unconfirmed estimates of child prostitutes
range from 2,000 to 30,000. Occasional and rare instances of debt bondage of
children are also reported. In addition, the civil war in the country has drawn
many children into the battleground.
One of the most destructive forms of child labour in Sri Lanka prevails in the
fishing industry. Children are recruited in the fishing ‘vaadiyas’. Vaadiyas are
very remote and children are kept in conditions of virtual slavery. (ILO-IPEC,
Country Paper: Sri Lanka, September 1999)
The LTTE uses high school level children for work as cooks, messengers, and
clerks and occasionally, assist help build fortifications. LTTE is also known to
recruit children as young as age 10 for 2 to 4 years in special schools and
impart mixture of LTTE ideology and formal education and use children as
young as 13 years of age in battle. Beginning in May 1999, a programme of
compulsory physical training and mock military drills was initiated for all
sections of the population including school children in the LTTE controlled
area to provide ready army of people, particularly children. 87 An assessment
of the LTTE fighters killed in combat reveals that 40% of its fighting force are
both males and females between 9 and 18 years of age. Another study done
Child Labour in South Asia M 37

Issues related to child labour are
connected with various socio-economic
factors, nevertheless, poverty is
considered the main cause, which is
the antecedent to illiteracy, low
productivity and poor health.
38 M Child Labour in South Asia
by a UK-based Sinhala researcher, Dushy Ranatunge, indicates that at least
60% of the dead LTTE fighters were under 18, and of these, most are girls
and boys aged 10-16 years. (CSUCS, Asia Report, July 2000, citing R.
Gunaratna, “LTTE child combatants”, Jane’s Intelligence Review, July 1998)
Child Labour in Export Industry
According to the law, children under age 16 are not allowed to be employed
in any public enterprise in which life or limb is endangered. The use of
children in the export industry is not reported. In general, children are not
employed in the EPZs, the garment industry, or any other export industry,
although children sometimes are employed during harvest periods in the
plantation sectors and in non-plantation agriculture.88
Region Specific Causes of Child Labour
Various studies conducted on ascertaining the causes of child labour are
primarily country specific. Given the diversity both within and across these
countries, the causes for child labour are case-sensitive. Nevertheless, as one
looks at these country-specific determinants, a common set of causes can be
discerned for the region of South Asia as a whole. These as well as the
country specific causes of child labour are discussed below.
Issues related to child labour are connected with various socio-economic
factors, nevertheless, poverty is considered the main cause, which is the
antecedent to illiteracy, low productivity and poor health. Poverty is largely
the reason why families send their child to work, but putting children to work
in place of education. When a child is born in poverty where he is deprived
of childhood and basic requirements to lead a safe, secure and health life. He
grows generally with poor mental and physical health resulting into low
productivity. It becomes next to impossible for him to provide his children with
education and they in turn start working. If they would not do so their would
be no food for their families or themselves. If mothers could choose, they
would send their children to school. It is the circumstances that are hard and
compelling.
When a child’s family is very poor, there is no creative growth, no play for
the child. There’s no time that the child can spend doing something that is
not essential for the family’s survival.
Poverty
Poverty, both at country and household level constitutes the most significant
determinant of child labour in South Asia. In Bangladesh, for example, about
55 million people in Bangladesh live below the poverty line. In this situation
of abject poverty, child labour contributes about 20-25 percent of the family
income, most of which is spent on food, thus making child income critical to
their survival. Similarly, in India, poverty constitutes the major factor in
driving children to work. The backward and drought-prone areas record high
incidences of child labour. The population of people living below poverty line
in India is nearly one third of the total population. Studies have found that
nearly half of the families with working children are below the poverty line.
As estimated number of about 77 million children under 14 years belong to
families below the poverty line. This provides a ready pool of abundant child
labour supply that outpaces demand. The result is a downward trend in wages
which keeps the child and his family in perpetual poverty thereby further re-
enforcing child labour.

In an ILO survey of four countries,
the main reason cited by parents in
India for letting their child work was
“the need to supplement the household
income,” followed by “to help in the
household enterprise”.
The pattern of landholdings in India
due to a limited land reform
programme has perpetuated debt
burden of rural population and
plight of rural labourers and
marginal farmers forcing their
children to work.
In situations of poverty, children are considered as an asset supplementing
family’s meagre incomes. In an ILO survey of four countries, the main reason
cited by parents in India for letting their child work was “the need to
supplement the household income,” followed by “to help in the household
enterprise”. Other reasons were “lack of labour for household enterprises”
and “sustenance of self,” the latter interpreted as covering also the “sustenance
of other family members.”89 Surveys in rural Indian have also found that poor
households with no or negligible savings or current assets are unable to
borrow money and hence, are compelled to send children to work.90
Likewise, Nepal being one of the poorest countries in the world has about 70
percent of people living in poverty (about 50 percent of these live in abject
poverty and 20 percent just above that level), which encourages child labour
practices. According to the CWIN study on urban child labour in Nepal, there
is a direct link between poverty and child labour in Nepal. For example,
majority of the children working as rag pickers, shoe cleaners, hotel kanchha,
street children, carpet weavers in Kathmandu Municipality, reported poverty
as a main reason for their work.
In Pakistan and Sri Lanka too, household poverty and need to supplement
household income is one of the important factor for sending their children to
work. But, in variance of the general trend in other countries of South Asia,
children’s assistance in the household enterprise is also cited as a major factor.
The survey conducted in Pakistan likewise, noted that 54 percent of the
parents let their children work primarily to assist in household enterprises to
supplement household incomes. Approximately 27 percent parents cite need
to supplement household income as another reason and 14 percent says that
their children work because no one else is available to undertake the household
chores. About 0.85 percent parents/guardian cited payment of outstanding
debt and 3.05 percent cited ‘other’ reason. The Pakistan survey also did not
ascertain correlation between household income levels and working children
as nearly 39 percent of children are from households, whose income is
between Rs. 2501-4000, followed by 31 percent in the income range of Rs.
1501-2500. From household with income of Rs. 4001 and above, 21 percent
children work and 9 percent come from income group with less than Rs.
1500.91
Sri Lanka too shows similar pattern as majority, i.e. 58.3 percent of parents
cited assistance in the household/family enterprise as the reason for letting
their child work while 28 percent parents let their children work for economic
gains in order to supplement household incomes. Poverty factor influences
nearly 28 percent of children who work for money.92
Mode of Production and Pattern of Landholdings
The predominantly agricultural economies along with the feudal landholding
pattern also perpetuate the phenomenon of child labour in the region. For
instance, the pattern of landholdings in India due to a limited land reform
programme except in the state of West Bengal (one of the lowest child labour
rates) has perpetuated debt burden of rural population and plight of rural
labourers and marginal farmers forcing their children to work. The consequent
migration from rural to urban areas to escape rural poverty in search of jobs
is fairly widespread in India which also contributes to child labour.
Similarly, in Nepal agriculture remains the mainstay of labour employment
with about 80 percent of the population employed in this sector. However,
Child Labour in South Asia M 39

Parents do not attach importance to
education and instead opt for short-
term economic gains accrued from
child labour. This trend is also
perpetuated by the absence of any
assured correlation between education
and better jobs.
The phenomenon of child labour in
India is closely linked to illiteracy,
in addition to poverty. According to
ORGB 1983 survey, over 64 percent of
the child workers were illiterate.
40 M Child Labour in South Asia
only 30 percent of land is arable resulting in slow agricultural growth and
sluggish economy, thus perpetuating poverty levels and child labour. Besides,
since Nepal is 80-90 percent rural, the majority of the child labour is to be
found in rural areas. The feudal history of Nepal combined with landholding
pattern and moneylenders’ exploitation provides a fertile ground for flourishing
of child labour practices. Only 6 percent of the people own 46 percent of the
land. The rest, in order to avoid poverty, often migrate to cities, thus providing
a permanent pool of labour including child labour. The feudal system in
Pakistan also perpetuates the phenomenon of child labour, bonded child
labour in particular.
Lack of Education and Illiteracy
Another determinant for child labour in South Asia is the dynamic relationship
between education, poverty and household behaviour. For instance, parents
do not attach importance to education and instead opt for short-term economic
gains accrued from child labour. This trend is also perpetuated by the absence
of any assured correlation between education and better jobs. In this situation,
employment in some industries such as engineering workshops, manufacturing,
etc. is considered an opportunity to acquire vocational training which is
considered ‘more useful’ than primary education. Besides, the master-apprentice
system in the non-formal sector also operates within a family environment
resulting in widespread incidences of working child, i.e. if a family has some
special skills their obvious choice is to impart this skill to their off-springs
which encourages children working as apprentice with his/her parents.
Lack of educational opportunities particularly in the rural areas also perpetuates
child labour as the distance to school and accessibly hinders attendance and
results in high drop-out rates of students who inevitably join the labour force.
Besides, education continues to be an expensive proposition. Sometimes,
nearly one-third of the poor family income is spent on education of a child.
Since most families have more than one child, providing education for all the
children in the family is not possible. Even when the fee is paid for, the poor
families find it hard to manage the costs of books, stationery and uniform.
Children are thus forced to work to pay for their education or not study at
all.93
In Sri Lanka, the number of children who are sent to work to supplement
household income is 243,893 out of which 103,664 do not attend school which
means that due to lack of resources/poverty, parents cannot send their children
to school. According to the survey, 20 percent of children have stopped
schooling to engage in economic activities and 12 percent have dropped out
due to financial difficulties and 11 percent due to uncertainty of higher
education.94
Similarly, the phenomenon of child labour in India is closely linked to illiteracy,
in addition to poverty. According to ORGB 1983 survey, over 64 percent of
the child workers were illiterate. According to Myron Weiner, prevalence of
child labour is attributable “largely to the failure of the educational system.”
Since primary education is not compulsory in India, children drop-out of
school and work as labourers. The lack of adequate infrastructure and link
between life opportunities and education in addition to economic circumstances
act as another contributory factor to the causes of child labour in India.

There is a correlation between high
incidences of child labour and school
drop-out rates in India. For instance,
the school drop-out rates for states
with higher child labour incidences
such as Andhra Pradesh are 75
percent, while for Bihar it is 81
percent. By contrast in Kerala which
also has the lowest incidences of
child labour, the drop-out rates are
16 percent.
Enforcement of the child labour laws
remains a problem due to lack of
resources and corrupt practices in all
countries of South Asia. Since
majority of children are located in
informal sector and household
enterprises, monitoring and
enforcement becomes a problem due to
resource constraints.
According to a reference note prepared by the Ministry of Labour, Government
of India, there is a correlation between high incidences of child labour and
school drop-out rates in India. For instance, the school drop-out rates for
states with higher child labour incidences such as Andhra Pradesh are 75
percent, while for Bihar it is 81 percent. By contrast in Kerala which also has
the lowest incidences of child labour, the drop-out rates are 16 percent. The
ILO survey too finds a correlation between school attendance and child labour.
Important reasons cited for other children never having attended school were
lack of interest in studies, cost and the need for participation in the household
economic activities such as looking after their younger siblings. About 2-3
percent of rural children never went to school because they were afraid of
teachers or schoolmates. School drop-out is often due to the pressure for
participation in household economic activities.95
In Nepal, majority of working children are not only illiterate but also belong
to less educated families. In Pakistan, 33.2 percent of working children are
illiterate. Here also, there is a direct correlation between work participation
rate of children and the education level of the household head in question.
In other words, children’s participation rate decreases as the educational level
of the head of the family increases.
Lack of Adequate Legal Remedies and ineffective enforcement
Finally, the absence of a coherent government policy, non-implementation of
existing laws and poor surveillance, enforcement and intervention mechanisms
sustains the phenomenon of child labour. Legal remedies for elimination of
child labour have been inadequate and thus failed to check the problem of
child labour. Enforcement of the child labour laws remains a problem due to
lack of resources and corrupt practices in all countries of South Asia. Since
majority of children are located in informal sector and household enterprises,
monitoring and enforcement becomes a problem due to resource constraints.
For example, in Pakistan the number of child labour inspectors in most
districts is limited both in numbers and training and other resources. The
practice of corruption is another obstacle. Under the existing law, inspectors
may not inspect facilities that employ less than 10 persons although most child
labour occurs in facilities smaller than this. The rate of conviction is insufficient
and even in case of a conviction, penalty is very light (ranging from an
average of $6/PRs 364 in the NWFP to an average of $110/ PRs 7,280 in
Baluchistan, even though the Employment of Children Act allows for fines of
up to US $275/ PRs 18,200) and is not a sufficient deterrent to the practice
of child labour.96
Other Factors
Poverty continues to be the main reason for the ample supply of cheap child
labour and provides the most compelling economic rationale for child labour.
However, on the demand side, children are also employed because (1) children
are docile, (2) they are less likely to be absent – this in important in the
informal sector where labourers are employed on a daily basis and thus
require full strength of workers every day, (3) they do not form unions and
their employment reduces the possibility of hartal or strike, (4) management
of children is easy, and (5) the owners feel sorry for poor children and give
them work. In some sectors, children are believed to be uniquely suited for
the work such as carpet and gem industries. It is said that nimble fingers can
weave 41 greater number of knots in carpets and polish tiny gems more
efficiently.97
Child Labour in South Asia M 41

In the case of Bangladesh, an
additional factor of natural
calamities (floods, cyclones, river-
bank erosion, etc.) often results in an
increase in the incidences of child
labour from poor families which do
not have the wherewithal to deal
with such emergencies.
42 M Child Labour in South Asia
Country and Culture Specific Causes
Apart from these common factors (poverty, illiteracy, nature and level of
education system, supply factors, lack of effective enforcement of existing
laws), which applies to South Asia in general, some reasons are country
specific, e.g. In the case of Bangladesh, an additional factor of natural calamities
(floods, cyclones, river-bank erosion, etc.) often results in an increase in the
incidences of child labour from poor families which do not have the wherewithal
to deal with such emergencies. Children from such families thus become the
worst victims of such natural disasters.
The cultural factor cited in the Indian case is that “child labour is intertwined
in India’s caste system and the acceptance of inequality associated with this
form of social and economic stratification.” The ORGB survey of 1983 pointed
out that at least 80 percent of child labourers were from scheduled caste and
schedules tribes and minority Muslim community, especially in the carpet and
gemstone industries.98 According to the US Department of State, in India the
“continued prevalence of child labour is attributed to social acceptance of the
practice, to the failure of the state and federal governments to make primary
school education compulsory, and ineffective state and federal government
enforcement of existing laws.”99 In Nepal too, with nearly 85 percent of
population being Hindu (5 percent Tibeto-Burman and others being sherpas
and lamas) caste hierarchies play its role. Besides, the concept of children’s
rights is absent and at best marginal amongst poorer households. Also, societal
attitudes favour working children as it is generally believed that children
should support themselves and their families and become responsible rather
than being vagrant, street urchins and beggars.100
Based on the above discussion about theoretical and region-specific causes of
child labour in South Asia, the next section will discuss the relevance (if any)
of the trade sanction approach to alleviate the problem of child labour.
Child Labour in South Asia M 43

The trade intervention has taken the
form of either the threat of or
immediate ban or labelling of
products. Labelling is considered to
be a market-based mechanism, giving
customers the choice to decide on the
products based on social labelling.
The Nineties saw the use of trade
sanction to alleviate the problem of
child labour by the US policy-makers
and also by some countries in the EU.
The sectors that were affected in
countries of South Asia were apparel/
garment industry in Bangladesh,
carpet industry in Nepal, football
industry in Pakistan, and carpet and
bidi industry in India.
44 M Child Labour in South Asia
IV
A Critical Analysis (Evaluation) of
Trade Sanction Approach
The application of trade sanctions approach to combat the problem of child
labour gained ascendancy in the nineties as a result of advocacy by various
trade unions and pressure groups in the US and Europe, supported by
mounting media campaign and calls for boycott of goods made using child
labour. The trade intervention has taken the form of either the threat of or
immediate ban or labelling of products. Labelling is considered to be a market-
based mechanism, giving customers the choice to decide on the products based
on social labelling. These initiatives are aimed at improving the living and
working conditions of the group/community by exerting pressure on the
exporters/suppliers to enforce better working conditions including prohibiting
child labour. Although these are mostly voluntary initiatives, the choice for
producers is very limited as the non-use of a certain label may result in
boycott of his product. In practice thus, labelling becomes the de facto mandatory
requirement in trade.
In some instances, positive trade incentives under the Generalised System of
Preferences (GSP) are also used to ensure compliance with certain labour
standards. For example, the European Union’s new GSP, 1998 while providing
reduced tariffs on the import of many products from developing countries,
requires a ban on prison labour and slave labour, respect for trade union
rights, and prohibition of child labour, as defined by ILO conventions. Countries
which provide proof of compliance receive privileged access to EU markets.
Similarly, the GSP of the US has been extended and occasionally revoked in
order to ensure compliance with certain labour standards.
Impact of Trade-Sanctions
The Nineties saw the use of trade sanction to alleviate the problem of child
labour by the US policy-makers and also by some countries in the EU. The
sectors that were affected in countries of South Asia were apparel/ garment
industry in Bangladesh, carpet industry in Nepal, football industry in Pakistan,
and carpet and bidi industry in India. The immediate cause of these trade
measures was some legislative initiatives taken within the US Congress,
particularly the 1993 the Harkin Bill – the Child Labour Deterrence Act,
introduced by Senator Tom Harkin which proposed to ban the import of those
goods into the US that used child labour in its production process, either
wholly or partly.101
Bangladesh
The impact of the bill was most pronounced on the garment industry in
Bangladesh. In addition to this bill (which was not passed but caused severe
indirect impact), the American television newsmagazine – NBC Dateline carried
a feature on child labour in Bangladesh garment industry which manufactured

Fearing boycott and resulting loss in
market share, the BGMEA announced
on 4 July 1994 that it would
eliminate child labour in the garment
industry by 31 October 1994, resulting
in the dismissal of nearly 50,000
children from the garment industry
which affected nearly 1.5 million
families dependent upon the earnings
from child labour.
A case in point is that of a former
garment worker, 12 year old Saleha,
who now worked for 8 hours a day in
brick-breaking work. Her total
earning declined to Taka 16-18 (US$
0.45) from the earlier Taka 38 (US$
1.00).
garments for supply to the Wal-Mart stores in the US. As a result of a public
outcry, the company cancelled its contract with the Bangladeshi manufacturers.
This had a snowballing adverse impact on other manufactures and suppliers
in the garment industry. Here it must be noted that the US is the biggest
markets for garment exports from Bangladesh comprising more than half of
the total garment exports from Bangladesh. Fearing boycott and resulting loss
in market share, the BGMEA announced on 4 July 1994 that it would
eliminate child labour in the garment industry by 31 October 1994, resulting
in the dismissal of nearly 50,000 children from the garment industry which
affected nearly 1.5 million families dependent upon the earnings from child
labour.
The consequences for the children displaced from relatively safe work places
and their family income were disastrous. According to a study, instead of
returning to education, most of them took up hazardous work in leatherwork,
brick-making, a lot many turned to begging and domestic servants and
alarmingly, some children turned to prostitution to survive. Some reports
noted that some of the children now worked in hidden sweatshops hired by
subcontractors in conditions worse than before while most of the children
shifted to more dangerous, low paid work in the informal sector.
In particular, it affected female child labour badly as the removal of young
women and girls from the factories adversely affected their chances of
increasing their independence, financial security and even their prospects for
marriage. A case in point is that of a former garment worker, 12 year old
Saleha, who now worked for 8 hours a day in brick-breaking work. Her total
earning declined to Taka 16-18 (US$ 0.45) from the earlier Taka 38 (US$
1.00). According to Save the Children Fund, “she used to earn folding and
packing clothes in a garment factory. She now worked all day in hot sun,
exposed to pollution and harassment from passers by. Neither ‘saved’ from
exploitative work, nor able to obtain an education, Saleha and thousands like
her, were victims, not beneficiaries of ill-considered action.”102
The overall impact on economy was also significant due to the loss of an
estimated half billion US dollars in 1994-1995. Critics of the trade sanction
approach point to the fact that the “loss of foreign exchange earnings of this
magnitude actually denies Bangladesh the opportunity to finance the industrial
and economic growth which would create the conditions under which child
labour would disappear.”103
Subsequently, as part of rehabilitation work, the representatives of the ILO,
the AAFLI and the US embassy officials asked BGMEA to stop firing child
workers till adequate safety nets were in place. In July 1995, a Memorandum
of Understanding (MOU) was signed between BGMEA, the ILO and the
UNICEF which prevented the hiring and retention of child workers in garment
factories, provided for placement of all dismissed child labours in schools once
they are set up, provided jobs to qualified adult family member of the child
worker, in addition to an employment guarantee once the child completes
school.
However, by this time many children had already lost their jobs and were
neither given compensation or schooling. A study carried out in the fall of
1995 found that the number of child workers in BGMEA factories came down
to approximately 11,000. However, despite the fact that by September 1996,
Child Labour in South Asia M 45

In the case of Pakistan, the United
States revoked trade benefits under
the GSP in 1996 for certain goods,
such as leather sporting goods,
surgical instruments, and hand-loomed
carpets, due to the tardy progress on
various worker rights issues including
child labour.
According to some exporters of
football, implementing child labour
reforms has increased their
production costs, making their
products less competitive in the world
market.
46 M Child Labour in South Asia
130 MOU schools were open, only 2300 former child workers were enrolled
in them.104 These children were offered 300 taka (approximately US $ 7.90)
a month to attend school, not as compensation but to lessen the economic
costs to the household. Nevertheless, according to the 1998 ILO-UNICEF
survey amongst sacked children, only 5000 remained in school. Others were
probably absorbed in hazardous employment. The situation emergent as a
result of trade sanctions thus was found to be dismal for child workers. Even
the rehabilitation initiatives could not wholly mitigate the consequences.
Pakistan
In the case of Pakistan, the United States revoked trade benefits under the
GSP in 1996 for certain goods, such as leather sporting goods, surgical
instruments, and hand-loomed carpets, due to the tardy progress on various
worker rights issues including child labour. Simultaneously, similar to the
situation in Bangladesh, the revelation about the rampant occurrence of child
labour in the football-making industry at Sialkot led to demand from western
consumer/pressure groups, trade unions and NGOs for a boycott of products
from Sialkot unless child labour was banned.
In response, in 1996 the MNCs such as Nike and Reebok agreed with their
contractors in Sialkot to ban child labourers in football stitching. As a result,
the production of football shifted from houses to well-monitored centres. The
consequences particularly for women were difficult. According to Sajid Kazmi
of the Sustainable Development Policy Institute, Islamabad, “it is very easy for
women to stitch footballs in household, now many of them have lost work
because they cannot leave their homes; and if children cannot work in the
football industry, they will shift to more hazardous work.” An illustrative
example of such processes is that of Nabeed Arain, who used to stitch footballs
at home with his mother. When the ban was introduced, the 13-year-old went
to a small school funded by Reebok. In 18 months, he dropped out after his
teacher dismissed him as a slow learner. For the past six months he has been
grinding scissors in a dirty workshop in Sialkot for 12 hours a day as he learns
the complex process of making surgical instruments.” Although he gets more
money than in making football (Rs. 1,000, £ 11) a month, he is candid in
admitting that there is no choice that he has.105
Many of the children shifted to hazardous industries such as brick kilns and
car workshops and the production of surgical instruments. The consequences
for companies has been the rise in cost who felt that they are not being
rewarded for their effort to eliminate child labour and little effort has been
made to improve actual working conditions. According to some exporters of
football, implementing child labour reforms has increased their production
costs, making their products less competitive in the world market.106
As a remedial measure, a number of donor agencies and concerned MNCs
came forward for help. In 1997, Reebok pledged US$ one million as aid to
educational programmes in Pakistan in areas where child labour are
widespread. The UK Department for International Development (DfID)
provided funding for the National Rural Support Programme aimed at a credit
and savings scheme to augment families’ income to reduce the need for
children to work. The targeted villages were the ones where more than 30
percent stitcher households were located. Around 101 million Rupees (US$ 1.9
million) has been disbursed amongst 70,000 people and it is estimated that it
has benefited 40,000 children and their families until December 1999, including
former child stichers, their siblings and children involved in other work and

Fund aimed at providing social
protection to those children and their
families, formerly employed in the
industry. This sought to address the
root causes of child labour through
interventions around poverty
alleviation and education
development.
In manufacture of surgical
instruments and also carpet industry,
both export earning industries, the
ILO along with SCCI has also
initiated projects aimed at promoting
educational opportunities to ban
employment of child labour.
also 5,000 families who took loans for setting up small businesses. According
to a survey, 17 percent children worked in targeted areas compared with 26
percent in non-project areas.107
In 1997, Sialkot Chambers of Commerce and Industry (SCCI) signed the
Atlanta Agreement with ILO, UNICEF and leading sports goods associations
to implement a program to eliminate child labour from the soccer ball sector
over a period of 18 months. The Atlanta Agreement resulted in establishment
of a presence in Sialkot of ILO International Program on Elimination of Child
Labour (IPEC) funded by USDOL, other bilateral donors and contributions
from local firms through SCCI. It introduced ILO monitoring of soccer ball
production. Currently, over 60 firms are engaged in IPEC, accounting for an
estimated three quarters of total soccer ball production. In addition, the
Atlanta Agreement supported initiatives by UNICEF and Save the Children
Fund aimed at providing social protection to those children and their families,
formerly employed in the industry. This sought to address the root causes
of child labour through interventions around poverty alleviation and education
development including support for schools, training and income generating
activities.108
The project to eliminate child labour from the football industry based in
Sialkot monitors the production of footballs at established stitching centres,
and has been instrumental in setting up 185 rehabilitation centres to educate
former child labourers and their younger siblings. The project also identifies
unemployed adults, especially women, from the families of former child stitchers
to take up stitching work and replace lost income.109 Since the ban, 6,000
children have enrolled in new schools set up by the ILO to prepare them for
mainstream education. Up to 2001, 1,660 children have joined the mainstream
education; another 1,760 were dropouts who simply shifted to other jobs,
sometimes hazardous.
ILO has also funded inspectors to monitor small home-based football stitching
centres as it has been permitted to establish home-based workshops with 3
or more stitchers registered in order for women to work in their community
and safeguard family incomes. By the year 2000, 358 home-based centres
were set up and 146 larger centres for female stitchers. By the end of the
year, the number of home-based centres had increased to 360, larger centres
to 186, and combined centres to 64. The ILO, which monitors more than 90
percent of export production, reported that it had found no evidence of
children working in any of the registered stitching centres and that it found
no unregistered centres.110
Simultaneously, some brand name leaders changed practices to reduce the
exposure to child labour. While Nike reduced number of their suppliers,
Reebok opted for direct monitoring using local NGOs and in developing child
labour education programs.
In manufacture of surgical instruments and also carpet industry, both export
earning industries, the ILO along with SCCI has also initiated projects aimed
at promoting educational opportunities to ban employment of child labour. The
surgical instrument industry after Federal Drug Administration’s pressure on
quality controls, has eliminated child labour from factory premises and all the
surgical instrument manufacturing units have displayed boards saying that
child labour is prohibited. But one finds children working with the various
vendors who do allied jobs (polishing, cutting, etc.) in this industry.111
Child Labour in South Asia M 47

Between 1993 and 1994, widely
reported incidences of child labour
combined with an economic slowdown
in Europe, adversely affected the
hand-woven carpet industry in Nepal.
According to trade figures, out of the
more than 3,000 carpet manufacturers
in late 1993, two thirds have gone out
of business.
Apart from outright ban, the trade
intervention approach is also being
pursued through the instrument of
labelling of child labour products.
The campaign on labelling was
launched by humanitarian and
religious organisations of consumer
countries through public awareness
and media campaign against child
labour in hand-knotted carpet
industry in India, Pakistan and
Nepal.
48 M Child Labour in South Asia
Nepal
The carpet industry of Nepal also received international attention because it
is an export-oriented industry and employs a large number of children where
the margin of profit for exporters is huge. There are thus parallels between
the Nepali carpet industry and the garment industry in Bangladesh and the
football-making industry in Pakistan, although the industry is less regulated
and less subjected to scrutiny from the outside. Between 1993 and 1994,
widely reported incidences of child labour combined with an economic slowdown
in Europe, adversely affected the hand-woven carpet industry in Nepal.
According to trade figures, out of the more than 3,000 carpet manufacturers
in late 1993, two thirds have gone out of business.112 Labelling initiatives and
accompanied trade sanctions initiated due to prevalence of child labour in the
industry cut income dramatically since 1996.113 The impact on child labour is
not well-documented but given the fact that a large number of children were
employed in this industry, closing down of factories would have adversely
affected them and their families.
India
In India, a select brand of bidi was subjected to a ‘detention’ order (preventing
marketing of the product in America) in 1999 when the US banned the import
of a particular brand of Indian bidi, alleging use of bonded child labour in the
industry. The move was prompted by a CBS News story, which ran a feature
on ‘60 Minutes’ regarding the use of bonded child labour by Mangalore-based
Ganesh Bidi Work.114
Since the US ban applied only to a select company, the immediate impact was
not significant in terms of loss of market. If the ban on import had extended
to the entire industry, India may have lost substantial revenue.115 The
consequent impact on the household industries employing child labour would
have been disastrous.
Impact of Labelling
Apart from outright ban, the trade intervention approach is also being pursued
through the instrument of labelling of child labour products. The campaign on
labelling was launched by humanitarian and religious organisations of consumer
countries through public awareness and media campaign against child labour
in hand-knotted carpet industry in India, Pakistan and Nepal. The resulting
decline in the demand for South Asian carpets prompted the governments,
manufacturers and exporters to accede to the child labour-free labelling
schemes being advocated. Subsequently, a number of social labelling initiatives
in South Asia such as Rugmark, Kaleen, Smiling Carpet, etc. were introduced.
Other products from South Asia were also brought under the ambit of
labelling schemes such as apparel and textiles, etc. Some of the labelling
initiatives and their details are given in Table 13.
The most successful amongst these was the Rugmark labelling programme
which was initiated as a result of consumer initiative in Europe, particularly
in Germany. In December 1995, the label became a legally-binding international
trademark in Germany and in the US in 1996 – the largest markets for carpet
exports from South Asia.116
 Table 13: Some Labelling Initiative Aimed at Child Labour Products in South Asia
Rugmark Kaleen * Care and Fair Step Dip
Year initiated 1994 1996 (not yet fully 1994 1995 1995
established)
Product or service labelled Hand-knotted Hand-knotted Hand-knotted carpets Hand-knotted Textiles and
carpets carpets carpets garments
Producer countries India & Nepal India only India & Nepal India,Nepal, Kenya, India
Pakistan
Industries targeted Carpets only Carpets only Carpets only Carpets only Textiles and
garments
Label has international patent Yes No No No Yes
protection
Label attached to individual Individual item, Individual item, at Displayed by retailer Retail outlet Item
item or displayed by retailer at time of export time of export on sales premises
Dominant consumer markets Germany & Germany Germany Switzerland Switzerland
United States
Other, competing labelling Care & Fair Care & Fair, Rugmark None None
initiatives in same market Rugmark
Aims at removing children 100% Guaranteed Made Without Child No Gradually Yes
completely from production Made Without Labour”
Child Labour”
Aims at rehabilitation/ No No No Yes No
improving working conditions
for children in industry
Aims at schooling for child Yes, has Has plans to do so Yes, has established Yes No
established some facilities
facilities
Operates mainly in producer or Both Producer Both Both Both
consumer country
Enjoys support of retailers in A few No Yes, sponsoring Somewhat Somewhat
consumer countries association includes
many retailers
Is well known in principal Somewhat No Yes Somewhat Somewhat
consumer market
Sponsorship Private National Retail trade NGOs Private
foundation government association
Has oversight board Yes Yes Yes Yes No
Receives financial support Partly, Germany Yes No No No
from local/national
governments only
Receives other external Yes No No No No
financing
Collects levies Yes Yes Yes Yes Yes
Performs on-site monitoring Yes No No - oversight by Some Yes
and inspections importers during
buying trips
Has internal system of Yes No No No Yes
verification and control
Permits some independent Yes Yes Not known Not known Not known
monitoring by other agencies
Programme adherence from Yes No, all exports No, must comply to Yes Yes
voluntary for producers India must carry maintain relation
label with German member
importers
Penalties for violations De-licensing of Not known Loss of sales No No
producers contracts

*
Initiated by Government of India through its Carpet Export Promotion Council in 1995 in response to Rugmark.
Source: Janet Hilowitz, Labelling Child Labour Products: A Preliminary Study, Geneva: ILO/ IPEC, 2000.

Child Labour in South Asia M 49


Studies conducted by the ILO on the
impact of informal social labelling in
the Indian carpet industry have
found the social labelling to be of a
limited value in solving the problem
of child labour.
As a result of a myopic trade
sanction approach, children working
in export-oriented industry in
countries of South Asia attracted
international attention and the
subsequent developmental assistance
whereas children in informal and
hazardous industries working in
appalling conditions did not attract
any attention or aid.
50 M Child Labour in South Asia
Studies conducted by the ILO on the impact of informal social labelling in the
Indian carpet industry have found the social labelling to be of a limited value
in solving the problem of child labour. It has to be complemented by other
measures such as effective enforcement of the law against child labour by the
agencies concerned. Although it is not possible to determine the impact of
labelling programmes on the elimination or reduction of child labour, some
studies have reported a notable decline in child labour in carpet industries
since Rugmark was initiated.
On the flip side, the initiative has resulted in shifting of carpet industries from
the carpet-belt to other areas, primarily to Rajasthan, where monitoring is
less frequent and effective. Some have even shifted to remote rural areas
within the carpet-belt, thus making inspections difficult, infrequent and time-
consuming.117
Another ILO/ IPEC study (2000) has not reached a final conclusion about the
decline in the overall incidences of child labour in the carpet industry as a
result of labelling initiatives. However, it noted a decline in the incidence of
hired child labour during the last decade, particularly since 1995. For example,
in comparison with the 45 percent hired child labour figure quoted by the 1993
NCAER report,118 this study put the proportion at 11 percent in the core
carpet-belt. A disturbing finding of the study was that in the extension areas
of Allahabad and Kosambi and in the new areas of Bihar, the proportion of
hired child labour remained high at 36 percent and 40 percent respectively.
Overall, the impact of labelling was limited and largely restricted to individual
registered looms and even there, awareness amongst the weavers about these
initiatives was non-existent. Also, the sub-contracting system of production
method in the carpet industry makes monitoring a gigantic and difficult task.
The study has concluded that the legislative measures such as the effective
enforcement of the Child Labour (Prohibition and Regulation) Act, 1986 has
played the most important role in contributing to the decline in child labour,
apart from media campaigns, NGOs’ interventions, increased enforcement
and vigilance by government agencies and labelling initiatives.119
As a result of a myopic trade sanction approach, children working in export-
oriented industry in countries of South Asia attracted international attention
and the subsequent developmental assistance whereas children in informal
and hazardous industries working in appalling conditions did not attract any
attention or aid. As discussed in section III, only a minority of child labour (5-
7 percent) works in the export sector in all countries of South Asia which are
mostly small and medium-sized export firms or neighbourhood and family
units. Trade sanctions approach thus has limited scope and only applies to the
export-oriented sections whereas majority of children in this region are
employed in non-tradable rural agricultural employment and urban informal
sectors and in family owned businesses and as domestic servants.
Even in tradable sectors, use of trade-related instruments has not solved but
often aggravated the problems of child labour. As evident from the case
studies in countries of South Asia, the trade sanctions approach to alleviate
the problem of child labour has been unable to tackle the root cases of the
problem, not to mention the fact that it has often accentuated the misery of
child labour. The children displaced from the export sectors simply shifted to
other work sometimes, more hazardous, lowly paid and in worse conditions.
The subsequent aid and rehabilitation packages with their holistic approach
to solving the problem of child labour were a limited success given the fact
that the initial damage was substantial. The trade sanctions approach thus can

According to the Human Development
Report, 2000 “the economic analysis
and evidence of the link between
trade and labour standards are
inconclusive.” Moreover, “trade
sanctions could be counterproductive,
hurting rather than helping workers
in poor countries.
According to the OECD study, ‘core
labour standards’ do not play a
significant role in shaping trade
performance. “The view which argues
that low-standards countries will
enjoy gains in export market shares
to the detriment of high-standards
countries appears to lack solid
empirical support.
not address the child labour problem in its totality, also because it does not
take into account the socio-economic and cultural factors influencing incidences
child labour.
According to the Human Development Report, 2000 “the economic analysis
and evidence of the link between trade and labour standards are inconclusive.”
Moreover, “trade sanctions could be counterproductive, hurting rather than
helping workers in poor countries. Sanctions and other penalties would further
constrain these countries’ access to global markets. . . Trade penalties can
have a much more devastating effect on a small country exporting only a few
commodities. . . Sanctions or even threats of a social clause may turn
government policies around. But workers’ rights depend on the behaviour
of individual employers—from a multinational corporation such as Nike or
Rio Tinto to a family with domestic servants— and that depends on the
enforcement of laws.”120
The argument given by the US Department of Labour that developing
countries’ emphasis on expanding growth based on certain labour-intensive
and low-skilled exports, such as carpets and garments may increase the
incidences of child labour121 has not been substantiated by any empirical
study. Besides, there is no empirical evidence to support the competitive
advantage argument either.
An empirical study conducted by the OECD does not establish any link
between labour standards and production costs but it has been noted that
labour standards are more closely adhered to in sectors exposed to international
competition compared to the sectors not exposed to international markets.
The analysis of the relationship between the differences in labour standards
and trade and foreign investment in OECD and some non-OECD counties has
concluded that it is not possible to provide empirical evidence on the linkage
between non-observance of core labour standards and unfair trade advantage.
Also, it is difficult to establish a correlation to show that countries with lower
labour standards show better export performance than countries with high
labour standards.122
According to this study, ‘core labour standards’ do not play a significant role
in shaping trade performance. “The view which argues that low-standards
countries will enjoy gains in export market shares to the detriment of high-
standards countries appears to lack solid empirical support. ... These findings
also imply that any fear on the part of developing countries that better core
standards would negatively affect either their economic performance or their
competitive position on world markets has no economic rationale.”123 The
converse logic of the same argument would indicate that leveraging trade
intervention to address compliance with labour standards (such as eradication
of child labour) is unlikely to bear many fruits.
Further, the idea that trade under the WTO regime can be an effective
instrument to secure labour rights including an end to the problem of child
labour assumes that universalisation of labour standards across countries and
regions is desirable, is untenable both theoretically and empirically. According
to Robert M Stern (2000) “because of the diversity of labour standards in
countries with differing national characteristics, policies, and institutions, the
case for devising WTO rules and disciplines to improve core labour standards
in low-income countries cannot be convincingly made.”124 According to
Srinivasan (1998), differences in labour standards among various countries is
Child Labour in South Asia M 51

The trade measures results in
thwarting the objective of free trade
and undermines economic development
and poverty alleviation which is the
root cause of child labour and in
fact may perpetuate or aggravate the
sufferings of child labour and their
families.
52 M Child Labour in South Asia
a reflection of different factor endowment and level of income and it is
consistent with the principle of free trade.
Thus, trade-based approach to enforce labour standards including elimination
of child labour is termed as a ‘campaign by the protectionist forces’ by several
scholars including Bhagwati (2001), Maskus (1997) and Srinivasan (1998).
Moreover, various scholars including Basu (1998, 1999), Basu, Grote and
Weinhold (1998), Jafarey and Lahiri (1999), Dessy (2001) Ranjan (2001) while
questioning the appropriateness of trade sanctions as an instrument of
addressing the problem of child labour, have pointed out that linking elimination
of child labour with trade sanctions would fail to reduce the incidences of child
labour. The move would not provide a lasting solution to the problem and may
be counter-productive and may hurt the poor countries and child labour in
these countries even more (as also established from the empirical evidence
emerging from the South Asian countries).
The trade measures results in thwarting the objective of free trade and
undermines economic development and poverty alleviation which is the root
cause of child labour and in fact may perpetuate or aggravate the sufferings
of child labour and their families. On the other hand, it is asserted that policies
targeted at alleviating poverty, illiteracy, liquidity constraints and distortions
in the labour and capital markets are likely to reduce the prevalence of child
work.
Child Labour in South Asia M 53
 V
Recommendations

• Recognise that trade-based approach to solve the problem of child labour

is of a very limited use as it targets a small group of children involved in
export sector alone. Even though, trade intervention may attract
international attention to the plight of child labour, it does not address the
issue in totality as it ignores the majority of children engaged in the
domestic sector of the economy and does not envisage a comprehensive
aid, education and rehabilitation package.

• Since incidences of child labour declines with rise in per capita income of
countries, facilitating free trade and open markets is the best way to
ensure economic development and the consequent elimination of child
labour and also raising other labour standards.

• At the country-level, targeted poverty alleviation programmes should be

initiated in regions rife with incidences of child labour. In addition, the
objective of compulsory primary education and quality education should be
vigorously pursued. Incentives to families as well as individual child workers
should be given to attend school. [Positive incentives such as mid-day meal
schemes and compensation to family may also help in eliminating child
labour.] At the same time, a vocational element should be included in the
school curricula so that there is a correlation between education and life
opportunities, leading to an added incentive for schooling and minimising
drop-out rates.

• At the international level, ILO not the WTO, with its long and credible
record in the field of child labour and other labour standards should form
the basis of multi-lateral understanding and solutions to the problem. The
ILO’s approach based on consensus, prescription and persuasion on labour
standards is sustainable in the long term rather than the punitive measures
as contemplated by the trade-based approach within the WTO forum.
Recently ILO has also launched a highly successful effort to obtain universal
commitment to the core labour standards. Since 1995, he number of
countries that have ratified all the core ILO conventions has more than
doubled.

• ILO’s enforcement and monitoring mechanism should be strengthened

and emphasis should be placed on universal ratification of the core ILO
conventions, particularly the relevant child labour conventions (C 138; C
182). Here, it may be underlined that amongst the core ILO conventions,
the child labour conventions have received the least number of ratifications
from the member countries (120 and 130 respectively out of 175 member
countries). ILO is becoming more aggressive in providing technical
assistance to improve member state performance with respect to the core
conventions, and in denouncing non-compliant members. Recently, for
the first time ILO has invoked Article 33 of its constitution to suspend

54 M Child Labour in South Asia

 Burma from participating in the ILO and receiving technical assistance,
due to that country’s labour practice (ILO Resolution on the widespread
use of forced labour in Myanmar, 87th Sess. June 1999)

• The trade unions along with the civil society needs to demonstrate so as
to why governments should prioritise children and public spending on
children, rather than cutback. This can be done through practice, through
good programmes, good work with children and education, health,
livelihoods, etc. The civil society has also to do an analysis and be able to
raise issues related to the economic models in their societies and its
negative social impacts on children. Strong advocacy is required on budget
allocations to improve the well being of children.

• There is a need to enrich data by launching comprehensive surveys to

assess the real magnitude and impact of the problem. A detailed data base
on child labour at country and regional levels should be created in order
to facilitate comparison and bring out issues that are not immediately
apparent to the policy-making process. This would go a long way in
ensuring holistic and long-term solution to the problem of child labour.

• There are various ways to arbitrate and the first and foremost is prevention.
The second one is withdrawal, but experience has shown that it is not
enough to just withdraw children from work, but to provide a package of
assistance. It had to be ensured that children are not just taken away, but
are given alternatives. The third area of intervention is protection but it
is a transitional measure. It remains the goal that children below the age
of 15 should not be working. However, often children simply cannot be
immediately removed, there can be programmes to protect children and
improve their working conditions.

Child Labour in South Asia M 55

 Endnotes
1 These principles are inherent in the eight core ILO conventions and are considered to be an integral part of human rights. These
are:
• C87 Freedom of Association and Protection of the Right to Organise Convention, 1948: ratified by 141 countries, 80.5 percent
of ILO’s 175 member-states.
• C98 Right to Organise and Collective Bargaining Convention, 1949: ratified by 152 countries, 86.8 percent of ILO’s member-
states.
• C29 Forced Labour Convention, 1930: ratified by 161 countries, 92.0 percent of ILO’s member-states.
• C105 Abolition of Forced Labour Convention, 1957: ratified by 156 countries, 89.1 percent of ILO’s member-states.
• C100 Equal Remuneration Convention, 1951: ratified by 159 countries, 90.8 percent of ILO’s member-states.
• C111 Discrimination (Employment and Occupation) Convention, 1958: ratified by 157 countries, 89.7 percent of ILO’s member-
states.
• C138 Minimum Age Convention, 1973: ratified by 120 countries, 68.5 percent of ILO’s member-states.
• C182 Worst Forms of Child Labour Convention, 1999: ratified by 132 countries, 75.4 percent of ILO’s member-states.
2 B Chatterji, and Pradeep S Mehta, Social Clause as an Element of the WTO Process, Monograph # 2, Jaipur: CUTS-CITEE, 1998.
3 Sumitra Chishti, ‘Globalisation, International Economic Relations and the Developing Countries’ in International Studies, vol 39, no
3, 2002, p 239.
4 P Madden, ‘What are the Social Clauses? Background and Definition’ in Should Working Conditions be Linked to International Trade:
A Report from a Seminar on Social Clauses in the WTO, Oslo: Centre for Trade & Development, Stiftelsen Alternative Handel, 1995.
5 The paper discusses the trajectory only in the context of GATT/ WTO. However it must be mentioned here that some of the regional
trade agreements which contain provisions on a social clause are European Economic Community, 1957, and the North American
Free Trade Agreement (NAFTA, 1994). The NAFTA side agreement created a labour commission to look into and promote key labour
standards which includes the issue of child labour among other standards and is the first international agreement that contains
provision of trade sanctions in case of failure of a country to respect workers rights. Amongst the commodity agreements, Tin
Agreement, 1981, Cocoa Agreement, 1986, Sugar Agreement, 1987 and the Natural Rubber Agreement, 1987 provide for fair labour
standards. Besides, European Generalised Tariff Preferences, 1971 meant for a number of developing countries provides for (after
consultation, investigation, etc.) temporary withdrawal of some or all custom duties or tariffs if goods involved forced labour. There
have been demands to include the minimum age provision under ILO Convention 138 within this arrangement. Similarly, under the
American Generalised System of Preferences, the beneficiary countries are expected to follow internationally recognised workers’
rights including the one on minimum working age.
6 See Steve Charnovitz, ‘The Influence of International Labour Standards on the World Trading Regime: A Historical Overview’, in
International Labour Review, vol. 126, no. 5, September-October, 1987, pp 565-584.
7 Sumitra Chishti, op.cit, p 239.
8 GATT was originally agreed in negotiations paralleling the negotiations for a larger agreement, the Havana Charter for an
International Trade Organisation drawn up by a United Nations Conference on Trade and Employment. The Charter’s chapter on
‘Commercial Policy’ was used as the basis for the establishment of the GATT. The Charter however never came into force because
of opposition in the United States Congress.
9 Steve Charnovitz (1987), op.cit, p 565.
10 Keith E Maskus, Should Core Labour Standards be Imposed through International Trade Policy, Washington DC: World Bank Policy
Research Working Paper no, 1817, 1997.
11 Singapore Ministerial Declaration 1996.
12 Economically active means work performed for a non-family-owned enterprise, whether or not paid including work performed within
the home for one’s own family if the work contributes in some way to overall household income.
13 ILO, Minimum Age Convention, 1973 (No. 138).
14 Some times children may take their own decisions to work, because their parents do not work, are alcoholics or deceased although
such cases are rather rare.
15 S R Khan, et al, Hazardous Home Based Sub-Contracted Work: A Study of Multiple Tiered Exploitation, Karachi: Oxford University
Press, forthcoming.
16 See Kaushik Basu, Child Labour: Causes, Consequences and Cure, with Remarks on International Labour Standards, World Bank Policy
Research Working Paper no 2027, 1999, Washington DC, 1998.
17 See B M Dinesh, Economic Activities of Children: Dimensions, Causes and Consequences, Delhi, Daya Publishing House, 1988, pp 1-
4.
18 UNICEF, The State of the World’s Children 1994, Geneva: UNICEF, 1994.
19 See Olga Nieuwenhuys, Children’s Lifeworlds: Gender, Welfare ad Labour in Developing World, London: Routledge, 1994, pp 12-14.
20 See Brown, D, Alan V. Deardorff and Robert M Stern, Child Labour: Theory, Evidence and Policy, Research Seminar on International
Economics Discussion Paper no. 474, 2001, p 3
21 See Christiaan Grootaert and Ravi Kanbur, Child Labour: A Review, World Bank Policy Research Working Paper no 1454, 1995,
pp 11-13.
22 See Saqib Jafarey and Sajal Lahiri, Child Labour: Theory, Policy and Evidence, University of Swansea Department of Economics
Discussion Paper no 00-09, 2000.
23 Christiaan Grootaert and Ravi Kanbur (1995), op. cit., p 14.
24 See Jean-Marie Baland and James A Robinson, ‘Is Child Labour Inefficient’ in Journal of Political Economy, vol 108, no 4, 2000,
p 666.

56 M Child Labour in South Asia

25 See Christiaan Grootaert and Ravi Kanbur (1995), op. cit., pp 20-21.
26 UNICEF, The State of the World’s Children 1997, Geneva: UNICEF, 1997, p 27.
27 Alan B. Krueger, Observations on International Standards and Trade, NBER Working Paper No. 5632, Cambridge, MA: National Bureau
of Economic Research, 1996, pp. 24-25.
28 Cited in Keith E Maskus (1997), op. cit.
29 P Fallon and Z Tzannatos: Child labour: Issues and directions for the World Bank, Washington DC: World Bank, 1998, pp 3-4.
30 S L Bachman, ‘A New Economics of Child Labour: Searching for Answers behind the Headlines’ in Journal of International Affairs,
vol 53 no 2, Spring 2000, pp 555-556.
31 UNICEF (1997), op. cit., pp 28-29.
32 Myron Weiner, The Child and the State in India: Child Labour and Education Policy in Comparative Perspective, Delhi: OUP, 1991,
pp 5-6.
33 Sonia Bhalotra, Is Child Work Necessary?, LSE Development and Distribution Series Discussion Paper no 25, 2000. First draft, 1998.
34 Applies to both labour force participation rates as well as children’s working hours.
35 Ranjan Ray (2001), op. cit.
36 See Anjli Garg, ‘A Child Labour Social Clause: Analysis and Proposal For Action’ In International Law And Politics, vol. 31, no 473,
1999, pp 480-483.
37 Ranjan Ray, Child Labour and Child Schooling in South Asia: A Cross Country Study of their Determinants, Paper presented at the
IDPAD Conference on Child Labour in South Asia 2001, New Delhi, 15-17 October 2001.
38 Christiaan Grootaert, Child Labor in Côte d’ Ivoire: Incidence and Determinants, Social Development Department Environmentally
and Socially, Sustainable Development Network, Washigton DC: World Bank, 1998.
39 Background Document Prepared for the Amsterdam Child Labour Conference, Geneva: International Labour Office, 1997.
40 See Grootaert, Christiaan and Ravi Kanbur, ‘Child Labour: An Economic Perspective’ in International Labour Review, vol 134, no
2, 1995, pp187-203.
41 N Ilahi, P F Orazem and G Sedlacek, The Implications of Child Labour for Adult Wages, Income and Poverty: Retrospective Evidence
from Brazil, Washington, DC: World Bank, 2000.
42 S R Khan, et al, op. cit.
43 Kaushik Basu and Pham Hoang Van, ‘The Economics of Child Labour’ in The American Economic Review, vol. 88 no. 3, June 1998,
p. 415.
44 Kaushik Basu, ‘The Intriguing Relation between Adult Minimum Wage and Child Labour’ in The Economic Journal, vol 110, March
2000, p C50.
45 See Priya Ranjan, ‘Credit Constraints and the Phenomenon of Child Labour’ in Journal of Development Economics, vol 64, 2001, p
84.
46 Jean-Marie Baland and James A Robinson (2000), op. cit. p. 664.
47 Ibid, pp 664-665.
48 Saqib Jafarey and Sajal Lahiri, Will Trade Sanctions Reduce Child Labour? The Role of Credit Markets, University of Essex Discussion
Paper 500, 1999.
49 Arnab K Basu, Ulrike Grote and Diana Weinhold, Considering the Determinants of Child Labour, ZEF Discussion Paper on Development
Policy, No. 1, 1998.
50 Credit market constraints can occur when parents are unable to borrow with the promise made by children that parents would be
reimbursed by them in future or when children are unable to borrow to reimburse their parents the forgone earning while going
to school.
51 Priya Ranjan (2001), op. cit, pp 81-82.
52 Rajeev H Dehejia and Roberta Gatti, Child Labour: The Role of Income Variability and Access to Credit in a Cross-Section of Countries,
NBER Working Paper no W 9018, 2002.
53 UNICEF (1997), op. cit., p 25.
54 The South Asia Association of Regional Economic Co-operation (SAARC) includes 7 countries: Bangladesh, Bhutan, India, Maldives,
Nepal, Pakistan, and Sri Lanka. Since Bhutan’s and Maldives’ share of world trade is rather small, the impact of trade sanctions
is going to be least significant as far as mitigating the problem of child labour is concerned (i.e., if one considers trade sanctions
as the appropriate approach). The study has thus, focussed on child labour in five countries of South Asia: Bangladesh, India, Nepal,
Pakistan and Sri Lanka.
55 World Bank, Addressing Child Labour in South Asia, Issue Brief, World Bank Group, January 2001.
56 US Department of Labour figures based on ILO and country surveys.
57 Summary Findings of Child Activity Survey in Sri Lanka, 1999, Colombo: Department of Census and Statistics, ministry of Finance
and Planning, Government of Sri Lanka/ ILO-IPEC, n.d.
58 See R Castle, D P Chaudhri and C Nyland, ‘Child Labour in South Asia: Domestic and International Initiatives (Including ILO and
WTO’s)’ in Proceedings of the National Seminar on Child Labour: Realities and Policy Dimensions, New Delhi, 5-7 December 2000
(organised by V V Giri National Labour Institute, Indian Society of Labour Economics and Institute for Human Development).
59 The reason could be different methodology and survey methods used (age group selected, definition of child labour, the fuzzy
boundaries between child labour, economically active children, etc, year of survey, etc.). Also since a large number of children work
in informal sectors, the figures are often difficult to estimate. Besides, due to legislative compulsions, there is a tendency to under-
report the incidences of child labour.
60 Report of the National Sample Survey of Child Labour in Bangladesh 1995-96, Dhaka: Bangladesh Bureau of Statistics, 1996.
61 US Country Reports on Human Rights Practices for 2001, Bureau of Democracy, Human Rights, and Labour U.S. Department of State,
March 2002, and USDOL, By the Sweat and Toil of Children 1994: A Report to Congress, Bureau of International Labour Affairs,
U.S. Department of Labour July 15, 1994 and Asia-Some Perspectives on Selected Countries, AusAID Report 1997.

Child Labour in South Asia M 57

62 USDOL, By the Sweat and Toil of Children 1994: A Report to Congress, Bureau of International Labour Affairs, U.S. Department
of Labour July 15, 1994, pp 23-24.
63 Mohammad M Rahman, Rasheda Khanam, ‘Child Labour in Bangladesh: A Critical Appraisal of Harkin’s Bill and the MOU-Type
Schooling Programme’ in Journal of Economic Issues, vol. XXXIII, no 4, December 1999, pp 985-1003.
64 Others doubt this decline. The ORGB in 1993 by linking school enrolment figures with the incidences of child labour, point out that
“by the turn of the century, the actual number of child workers in the country is expected to increase by about fifty percent in
rural area and by over one hundred percent in urban areas.”
65 GOI, Ministry of Labour Annual Report 2001-2002, New Delhi: Ministry of Labour, GOI, 2002, pp 107-108.
66 US Country Reports on Human Rights Practices for 2001, Bureau of Democracy, Human Rights, and Labour U.S. Department of State,
March 2002.
67 Child Labour in India: An Overview, Noida: VV Giri National Labour Institute, 1998, p. 22.
68 US Country Reports on Human Rights Practices for 2001, op. cit.
69 USDOL, By the Sweat and Toil of Children (1994), op. cit., pp 60-61.
70 US Country Reports on Human Rights Practices for 2001, op. cit.
71 USDOL, By the Sweat and Toil of Children (1994), op. cit., p 61.
72 Alakh N Sharma, Rajeev Sharma, Nikhil Raj, The Impact of Social Labelling on Child Labour in India’s Carpet Industry, ILO/IPEC
Working Paper 2000, New Delhi, 2000, p 16.
73 USDOL, By the Sweat and Toil of Children (1994), op. cit., pp 64-65.
74 Ranjit Dev Raj, Trade: India Tobacco TNCs Shed Crocodile Tears for Child Labour, Inter Press Service, 12 January 2000.
75 USDOL, By the Sweat and Toil of Children (1994), op. cit., pp 69-70.
76 Bhim Raj Suwal, Bal Kumar KC and Keshab Prasad Adhikari, Child Labour Situation in Nepal: Report From Migration and Employment
Survey, 1995/96, Kathmandu: Central Department of Population Studies, Tribhuvan University/ ILO-IPEC, 1997.
77 USDOL, By the Sweat and Toil of Children (1994), op. cit., pp. 96-98.
78 Denis Wright, ‘Child Labour in Nepal’ in Child Labour in Asia: Some Perspectives on Selected Countries, AusAID Report, 1997, p 73.
79 Aradhana Yadav, ‘Child Labour in India and Pakistan’ in Mainstream, December 2000, p. 129.
80 Many observers believe that the 1996 survey understates the problem, and estimate child labour to be around 20 million.
81 Summary Results of the Child Labour Survey in Pakistan,1996, Islamabad: Federal Bureau of Statistics/ ILO-IPEC, 1996.
82 US Country Reports on Human Rights Practices for 2001, op.cit.
83 S R Khan, op. cit.
84 US Country Reports on Human Rights Practices for 2001, op.cit.
85 USDOL, By the Sweat and Toil of Children (1994), op. cit., pp. 103-106.
86 Summary Findings of Child Activity Survey in Sri Lanka, 1999, Colombo: Department of Census and Statistics, ministry of Finance
and Planning, Government of Sri Lanka/ ILO-IPEC, n.d. Survey was conducted using a sample of 14,400 housing units in the areas
other than northern and eastern provinces.
87 US Country Reports on Human Rights Practices for 2001, op.cit.
88 ibid.
89 ILO, Child Labour Surveys: Result of Methodical Experiments in Four Countries 1992-93, Geneva: ILO, 1996.
90 World Development Report 1995, Washington DC: World Bank, 1995, p. 72.
91 Summary Results of the Child Labour Survey in Pakistan,1996, op. cit.
92 Summary Findings of Child Activity Survey in Sri Lanka, 1999, op. cit.
93 Background Document Prepared for the Amsterdam Child Labour Conference, op. cit.
94 Summary Findings of Child Activity Survey in Sri Lanka, 1999, op. cit., n.d.
95 ILO, Child Labour Surveys (1996), op. cit.
96 US Country Reports on Human Rights Practices for 2001, op.cit.
97 USDOL, By the Sweat and Toil of Children (1994), op. cit., pp 17-20.
98 Howard Brasted, ‘Child Labour in India’ in Child Labour in Asia: Some Perspectives on Selected Countries, AusAID Report 1997, p
23.
99 US Country Reports on Human Rights Practices for 2001, op. cit.
100 USDOL, By the Sweat and Toil of Children (1994), op. cit., pp 17-20.
101 The bill failed to be passed but caused widespread impact on certain export industries in South Asia. Subsequently, a number of
variants of this Bill were proposed in the US Congress. For instance, Sanders’ Amendment of the Trade Act of 1930 sought to extend
the already existing ban on the import of products made with “forced or indentured labour” to include “forced or indentured child
labour”. Similarly, the Harkin Child Labour Amendment proposed elimination of the worst form of child labour as an important
goal in US trade negotiation strategies. In 1997, a Bonded Child Labour Elimination Act was passed by the US Congress and received
the assent of the US President, Bill Clinton and became Law. It isolated child labour performed under circumstances tantamount
to involuntary servitude or under exposure to toxic substances or working conditions otherwise posing serious health hazard as a
ground for banning import of relevant goods. At the ground level, between 1991 and 2001, 24 detention orders were placed against
child slavery products out of which only 6 resulted in a ban. Efforts were also made on the preferential trading arrangements to
make US imports conditional on labour standards including an end to child labour. The US Trade and Development Act 2000 sought
to deny normal trade relations to countries that fail to ban ‘worst forms of child labour’ under the ILO Convention 182. The same
extended to GSP containing provisions to revoke favourable terms of trade in case of low labour standards.
102 Big Business, Small Hands: Responsible Approaches to Child Labour, London: Save the Children Fund, 2000, pp 41-42.
103 Denis Wright, ‘Child Labour in Bangladesh’ in Child Labour in Asia: Some Perspectives on Selected Countries, AusAID Report 1997,
p 49.

58 M Child Labour in South Asia

104 USDOL, The Apparel Industry and Codes of Conduct: A Solution to the International Child Labour Problem, US Department of Labour,
1996, p 7.
105 Rory McCarthy, ‘Football Ban Sends Child Worker into Worse Jobs’, Guardian, 25 April 2001.
106 US Country Reports on Human Rights Practices for 2001, op. cit.
107 Big Business, Small Hands (2000), op. cit.
108 K M Nadvi and S Kazmi, Global Standards and Local Responses, Institute of Development Studies Working Paper, Sussex: IDS,
University of Sussex, forthcoming.
109 US Country Reports on Human Rights Practices for 2001, op. cit.
110 ibid.
111 K M Nadvi and S Kazmi, op. cit.
112 Suman Pradhan, ‘Labour: Nepal-Carpet Industry Under Scrutiny For Flouting Laws’ in IPS News Report, 13 January 1999, http:/
/www.oneworld.org/ips2/jan99/09_00_012.html.
113 Denis Wright, ‘Child Labour in Nepal’ in Child Labour in Asia: Some Perspectives on Selected Countries, AusAID Report, 1997, p 69.
114 ‘US Bans Indian ‘Bidi’ Imports’ in Indian Express, 24 November 1999.
115 Shampa Bhattacharyya, ‘Child Labour in Beedi Industry: The Economic Dimensions’ in Business Line, 6 January 2000.
116 Janet Hilowitz, Labelling Child Labour Products: A Preliminary Study, Geneva: ILO/ IPEC, 2000.
117 ibid.
118 S Vijayagopalan, Child Labour in Carpet Industry – A Status Report, New Delhi: National Council of Applied Economic Research,
1993.
119 Alakh N. Sharma, Rajeev Sharma, Nikhil Raj (2000), op. cit., pp. 75-78.
120 UNDP, Human Development Report 2000, New Delhi: OUP (for UNDP), 2000, p 85.
121 USDOL, By the Sweat and Toil of Children (1994), op. cit., p 2.
122 OECD, Trade, Employment and Labour Standards: A Study of Core Workers’ Rights and International Trade,1996 quoted in Raymond
Torres, ‘Labour Standards and Trade’ in OECD Observer, no. 202, October-November, 1999.
123 OECD, Trade, Employment and Labour Standards: A Study of Core Workers’ Rights and International Trade, 1996, p 105.
124 Robert M Stern, ‘Labour Standards and Trade’ in Marco Bronckers and Reinhard Quick, eds., New Directions in International Economic
Law Essays in Honour of John H. Jackson, The Hague: Kluwer Law International, 2000.

Child Labour in South Asia M 59

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Child Labour in South Asia M 61

 CUTS’ PUBLICATIONS
TRADE, ECONOMICS AND ENVIRONMENT
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1. Policy shift in Indian Economy
A survey on the public perceptions of the New
Economic Policy in the states of Maharashtra,
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conducted during June/July 1995 and
recommendations to the government which were
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The study shows, with some evidence, that the
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In the scenario of a growing interest in banning child
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patents argue that developing countries would gain
from increased flows of trade, investment and
technology transfer. The paper questions this view
by examining both the functioning of patents in
developing economies in the past and current
structural trends in the world economy in these areas.
The historical research revealed no positive links
between a strong patent regime and FDI and
technology transfer. Current trends are largely limited
to exchanges amongst the industrialised countries and
to some extent, the newly industrialising countries.
While increased North/South trade flows are expected,
negative consequences are possible.
($25/Rs.100) ISBN 81-87222-36-0
13. Negotiating the TRIPs Agreement:
India’s experience and some domestic policy issues
This report shows particularities about the subject
that distinguished the TRIPs (Trade Related Aspects
of Intellectual Property Rights) negotiations from other
agreements that make up the Uruguay Round results.
It also analyses the way in which the TRIPs Agreement
was actually negotiated and handled.
The author finds that many of the lessons that
can be drawn from India’s experience with the TRIPs
negotiations are the same as those that can be drawn
from the negotiations more generally and true for many
other countries. It goes beyond a narrow analysis of
events relating strictly to the negotiations during the
Uruguay Round and looks at the negotiating context
in which these negotiations took place.
The research findings draw lessons from what
actually happened and suggest how policy processes
can be reformed and reorganised to address the
negotiating requirements in dealing with such issues
in the future. ($25/Rs.100) ISBN 81-87222-50-6
14. Multilateral Environmental Agreements, Trade and
Development: Issues and Policy Options Concerning
Compliance and Enforcement
The latest report of CUTS on Multilateral
Environmental Agreement, Trade and Development,
examines the role of provisions for technology and
financial transfer as well as capacity building as an
alternative to trade measures for improving compliance
and enforcement. It acquires specific significance in
the light of the fact that the WTO members for the first
time, in the trade body’s history, agreed to negotiate
on environmental issues at the fourth Ministerial
Conference of the WTO at Doha.
This study also examines pros and cons of Carrots
and Sticks approaches, and analyses incorporation of
these approaches in three major MEAs, the Montreal
Protocol, The Convention on International Trade in
Endangered Species of Wild Fauna and Flora (CITES)
and the Basel Convention, to find out which approach
has been more successful in ensuring enforcement
and compliance.
A must read for different stakeholders involved in
this process, as this study would provide useful inputs
towards trade and environment negotiations.
(Rs. 100/US$25) ISBN 81-87222-58-1
15. Market Access Implications of SPS and TBT:
Bangladesh Perspective
As both tariffs and other traditional trade barriers are
being progressively lowered, there are growing
concerns about the fact that new technical non-tariff
barriers are taking their place, such as sanitary and
phytosanitary measures (SPS) and technical
regulations and standards.
The poor countries have been denied market
access on quite a number of occasions when they
failed to comply with a developed country’s SPS or
TBT requirements or both. The seriousness of this
denial of market access is often not realised unless
their impact on exports, income and employment is
quantified.
In this paper, the author focuses on the findings
of a 1998 case study into the European Commission’s
ban of fishery products from Bangladesh into the EU,
imposed in July 1997.
This research report intends to increase
awareness in the North about the ground-level
situation in poor and developing countries. At the
same time, it makes some useful suggestions on how
the concerns of LDCs can be addressed best within
the multilateral framework. The suggestions are
equally applicable to the developing countries.
(Rs. 100/US$10) ISBN 81-87222-69-7
16. Pulling up Our Socks
- A Study of Competition Regimes of Seven
Developing Countries of Africa and Asia: The 7-up
Project
This report is the compilation and synthesis of the
research results of the 7-Up Project, which is a
comparative study of the competition regimes of seven
developing countries of the Commonwealth, namely,
India, Kenya, Pakistan, South Africa, Sri Lanka,
Tanzania and Zambia, implemented by CUTS, with the
support of the DFID, UK.
The report compares the institutional framework
in the project countries and analyses important issues
like legal provisions, autonomy of the institutions,
financial and human resources, etc. It concludes with
suggestions and recommendations for strengthening
the competition regimes in these countries.
(Rs. 250/US$15) ISBN 81-87222-74-3
Child Labour in South Asia M 63
17. Friends of Competition
– How to Building an Effective Competition Regime
In Developing and Transition Countries
This handbook, which has been prepared on the basis
of the experiences gained from the 7-Up Project, aims
to outline an ideal capacity building programme for
promoting an effective and healthy competition regime
in the targeted countries. With necessary variations
to suit the socio-politico-economic environment, this
would be applicable to most developing and transition
countries. (Rs. 100/US$10) ISBN 81-87222-72-7
DISCUSSION PAPERS
1. Existing Inequities in Trade - A Challenge to GATT
A much appreciated paper written by Pradeep S Mehta
and presented at the GATT Symposium on Trade,
Environment & sustainable Development, Geneva, 10-
11 June, 1994 which highlights the inconsistencies in
the contentious debates around trade and environment.
(10pp #9406 Rs 30/US$5)
2. Multilateralisation of Sovereignty: Proposals for
multilateral frameworks for investment
The paper written by Pradeep S Mehta and Raghav
Narsalay analyses the past, present and future of
investment liberalisation and regulation. It also
contains an alternative draft International Agreement
on Investment. (#9807, Rs.100/$25)
3. Ratchetting Market Access
Bipul Chatterjee and Raghav Narsalay analyses the
impact of the GATT Agreements on developing
countries. The analyses takes stock of what has
happened at the WTO until now, and flags issues for
comments. (#9810, Rs.100/$25)
4. Domestically Prohibited Goods, Trade in Toxic Waste
and Technology Transfer: Issues and Developments
This study by CUTS Centre for International Trade,
Economics & Environment attempts to highlight
concerns about the industrialised countries exporting
domestically prohibited goods (DPGs) and
technologies to the developing countries that are not
capable of disposing off these substances safely and
protecting their people from health and environmental
hazards. (ISBN 81-87222-40-9)
EVENT REPORT
1. Challenges in Implementing a Competition Policy and
Law: An Agenda for Action
This report is an outcome of the symposium held in
Geneva on “Competition Policy and Consumer Interest
in the Global Economy” on 12-13 October 2001. The
one-and-a-half-day event was organized by CUTS and
supported by the International Development Research
Centre (IDRC), Canada. The symposium was
addressed by international experts and practitioners
representing different stakeholder groups viz.
consumer organisations, NGOs, media, academia, etc.
64 M Child Labour in South Asia
and the audience comprised of participants from all
over the world, including representatives of Geneva
trade missions, UNCTAD, WTO, EC, etc. This
publication will assist people in understanding the
domestic as well as international challenges in respect
of competition law and policy.
(48pp. #0202, Rs.100/$25)
MONOGRAPHS
1. Role and the Impact of Advertising in Promoting
Sustainable Consumption in India
Economic liberalisation in India witnessed the arrival
of marketing and advertisement gimmicks, which had
not existed before. This monograph traces the the
impact of advertising on consumption in India since
1991. (25 pp, # 9803 Rs.15/US$5)
2. Social Clause as an Element of the WTO Process
The central question is whether poor labour standards
results in comparative advantage for a country or not.
The document analyses the political economy of the
debate on trade and labour standards. (14 pp #9804
Rs.15/US$5)
3. Is Trade Liberalisation Sustainable Over Time?
Economic policy is not an easy area for either the
laity or social activist to comprehend. To understand
the process of reforms, Dr. Kalyan Raipuria, Adviser,
Ministry of Commerce, Government of India wrote a
reader-friendly guide by using question/answer
format. (29 pp #9805 Rs.15/US$5)
4. Impact of the Economic Reforms in India on the Poor
The question is whether benefits of the reforms are
reaching the poor or not. This study aims to draw
attention to this factor by taking into account inter-
state investment pattern, employment and income
generation, the social and human development
indicators, the state of specific poverty alleviation
programmes as well as the impact on the poor in
selected occupations where they are concentrated.
(15 pp #9806 Rs.15/US$5)
5. Regulation: Why and How
From consumer’s viewpoint, markets and regulators
are complementary instruments. The role of the latter
is to compensate in some way the failings of the former.
The goal of this monograph is to provide a general
picture of the whys of regulation in a market economy.
(34 pp#9814 Rs.15/$5)
6. Snapshots from the Sustainability Route — A
Sample Profile from India
Consumption is an indicator of both economic
development and also social habits. The disparity in
consumption pattern has always been explained in
the context of the rural urban divide in India. The
monograph analyses the consumption patter of India
from the point of view of the global trend towards
sustainable consumption. (16pp #9903 Rs.15/$5)
7. Consumer Protection in the Global Economy
This monograph outlines the goals of a consumer
protection policy and also speaks about the
interaction between consumer protection laws and
competition laws. It also highlights the new
dimensions about delivering consumer redress in a
globalising world economy, which raises jurisdictional
issues and the sheer size of the market. (38pp #0101,
Rs.20/$5).
8. Globalisation and India – Myths and Realities
This monograph is an attempt to examine the myths
and realities so as to address some common fallacies
about globalisation and raise peoples’ awareness on
the potential benefits globalisation has to offer.
(40pp #0105, Rs.30/$5)
Monographs on Investment and Competition Policy
1. Role of Competition Policy in Economic Development
and The Indian Experience
Competition and efficiency are the guiding principles
of the liberal economic order. Any healthy competition
must have rules that the players should follow. This
is more so when the players are business
organisations and their activities will have a larger
impact on the society. This monograph examines the
role of an effective competition policy in economic
development from the Indian perspective.
(32pp #9908 Rs.15/$5)
2. FDI, mega-mergers and strategic alliances: is global
competition accelerating development or heading
towards world monopolies?
Foreign Direct Investment, mergers, amalgamations
and strategic alliances are the rules of the present
day global economy. However, the crucial question
is whether the movement of capital leads to further
development and welfare of the society or the growth
of monopolies. The monograph sheds light on the
main contours of the global competion and its
implication for the consumers. (24pp #9909 Rs. 15/$5)
3. Competition Regimes Around the World
In this paper, an attempt has been made to comply
briefly, the current state of Competition Law in some
select countries, on which information is readily
available. The paper steers clear of any value
judgements on the design and implementation of the
Competition Law in the countries covered herein.
(40pp #2002, Rs.20/$5).
4. Globalisation, Competition Policy and International
Trade Negotiations
This paper maps out the issues concerning multilateral
competition policy, from southern perspective. It
concludes that there is a need for a realistic assessment
of the Extent to which developing countries would be
able to control MNCs under the disciplines of
competition law. (38pp #2003, Rs.20/$5).
5. Trade, Competition & Multilateral Competition
Policy
As the title suggests, this monograph clarifies the
areas of interaction between trade and competition
through case studies, and shows that such
interactions are on rise. It also highlights efforts being
taken for a multilateral competition policy after
Second World War in form of Havana Charter till the
present happenings at the World Trade Organisation.
It further points out the provisions in various
agreements of the WTO acquis, which have the
elements of competition. Most importantly, the paper
brings forward the debate vis-à-vis multilateral
competition policy that is currently taking place at
various fora. It analytically points out the hindrances
in such a policy and highlights the need for a
multilateral competition policy. (36p #0005, Rs.20/$5).
6. All About Competition Policy & Law
This monograph meant for advance learner, deals with
various elements of competition law and policy in
comprehensive manner. It describes about various
restrictive business practices (RBPs) at the market
place. It further clarifies what are competition law and
policy, their elements and how they can be used to
curb various kinds of RBPs. It further draws out
interface of competition policy with economic
development, poor and foreign investment. Finally it
describes the genesis of competition law/policy and
in which direction it is moving.
(70pp #0006, Rs.20/$5).
7. All About International Investment Agreements
This briefing kit for the general reader provides an
overview of recent trends in the proliferating number
of bilateral and regional investment agreements. The
kit highlights the key issues in these agreements and
considers past initiatives and prospects at the
multilateral level. (64pp #0102, Rs.20/$5)
8. Competition Policy & Law Made Easy
This publication meant for the activists, aims at
generating minimum amount of awareness on
competition law and policy. It could be helpful for a
common person to identify anti-competitive practices
in the market place and take action to rectify the same.
(36pp. #0109, Rs.20/$5)
9. Making Investment Work for Developing Countries
This publication is another in our series of
monographs on investment and competition policy
intended to introduce related topics to a wide
audience. This monograph will also serve as a
reference point for those interested in the complex
and sometimes controversial relationship between
foreign direct investment and development.
(46pp. #0110, Rs.20/$5)
Child Labour in South Asia M 65
GUIDES
1. Unpacking the GATT
This book provides an easy guide to the main aspects
of the Uruguay Round agreements in a way that is
understandable for non-trade experts, and also
contains enough detail to make it a working document
for academics and activists. (US$5, Rs.60)
2. Consumer Agenda and the WTO—An Indian
Viewpoint
Analyses of strategic and WTO-related issues under
two broad heads, international agenda and domestic
agenda. (#9907)
NEWSLETTERS
Economiquity
A quarterly newsletter of the CUTS Centre for
International Trade, Economics & Environment for
private circulation among interested persons/
networks. Contributions are welcome: Rs.50/$15 p.a.
ReguLetter
A Quarterly Newsletter covering developments
relating to competition policy and economic
regulations. The purpose of this newsletter is to
provide a forum, in particular to civil society, to
understand the issues clearly and promote a healthy
competition culture in the world. Contributions are
welcome: Rs.50/$15 p.a.
BRIEFING PAPERS
Our Briefing Papers inform the layperson and raise issues
for further debate. These have been written by several
persons, with comments from others. Re-publication,
circulation etc are encouraged for wider education. They
are available for free, but contributions towards postage
(Rs.5/$5) are welcome.
1995
1. GATT, Patent Laws and Implications for India
2. Social Clause in the GATT - A Boon or Bane for India
3. Greening Consumer Choice? - Environmental Labelling
and the Consumer
4. Trade & Environment: the Inequitable Connection
5. Anti-Dumping Measures under GATT and Indian Law
6. Rational Drug Policy in South Asia - The Way Ahead
7. No Patents on Life Forms!
8. Legislative Reforms in a Liberalising Economy
1996
1. The Freezing Effect - Lack of Coherence in the New
World Trade Order
2. Competition Policy In A Globalising And Liberalising
World Economy
3. Curbing Inflation and Rising Prices - The Need for
Price Monitoring
66 M Child Labour in South Asia
4. Globalising Liberalisation Without Regulations! - Or,
how to regulate foreign investment and TNCs
5. The Circle of Poison - Unholy Trade in Domestically
Prohibited Goods
6. Swim Together or Sink - Costs of Economic Non-
Cooperation in South Asia (revised in Sept. 1998)
7. Carrying The SAARC Flag - Moving towards Regional
Economic Cooperation (Revised in Oct. 1998)
8. DPGs, Toxic Waste and Dirty Industries—Partners in
Flight
9. WTO: Beyond Singapore - The Need for Equity and
Coherence
1997
1. The Uruguay Round, and Going Beyond Singapore
2. Non-Tariff Barriers or Disguised Protectionism
3. Anti-Dumping Under the GATT - The Need For
Vigilance By Exporters
4. Subsidies & Countervailing Measures
5. Textiles & Clothing - Who Gains, Who Loses and Why?
6. Trade in Agriculture—Quest For Equality
7. Trade in Services-Cul de Sac or the Road Ahead!
8. TRIPs and Pharmaceuticals: Implications for India
9. Movement of Natural Persons Under GATS: Problems
and Prospects
1998
1. TRIPs, Biotechnology and Global Competition
2. Tariff Escalation—A Tax on Sustainability
3. Trade Liberalisation, Market Access and Non-tariff
Barriers
4. Trade, Labour, Global Competition and the Social Clause
5. Trade Liberalisation and Food Security
1999
1. The Linkages: Will It Escalate?
2. Trade and Environment—An Agenda for Developing
Countries
3. Dispute Settlement at WTO—From Politics to Legality?
4. TRIPs and Biodiversity
5. Eradicating Child Labour While Saving the Child—Who
Will Pay the Costs?
6. Overdue Reforms in European Agriculture—
Implications for Southern Consumers
7. Liberalisation and Poverty: Is there a virtuous circle
for India?
8. The Non-trade Concerns in the WTO Agreement on
Agriculture
9. Negotiating History of the Uruguay Round
10. Professional Services under the GATS–Implication for
the Accountancy Sector in India
2000
1. Implementation of the WTO Agreements: Coping with
the Problems
2. Trade and Environment: Seattle and Beyond
3. Seattle and the Smaller Countries
4. Dispute Settlement under the GATT/WTO: The
Experience of Developing Nations
5. Competition Regime in India: What is Required?
6. Biosafety Protocol: Sweet ‘N’ Sour
7. Process and Production Methods (PPMs)–
Implications for Developing Countries
8. Globalisation: Enhancing Competition or Creating
Monopolies?
9. Trade, Competition & Multilateral Competition Policy
10. The Functioning of Patent Monopoly Rights in
Developing Countries: In Whose Interest?
2001
1. Trade and Sustainable Development: An Outline of
A Southern Agenda
2. Contours of A national Competition policy: A
Development perspective
3. Human Rights and International Trade: Right Cause
With Wrong Intentions
4. Framework for Fair Trade and Poverty Eradication
5. Implementation of the Uruguay Round Agreements
Need for a Frontloaded Agenda
6. Proactive Agenda for Trade and Poverty Reduction
7. WTO Transparency and Accountability: The Need
for Reforms
8. EU's Environmental Agenda: Genuine Concern or
Pitching for Protectionism?
2002
1. Amicus Curiae Brief: Should the WTO Remain
Friendless?
2. Market Access: The Major Roadblocks
3. Foreign Direct Investment in India and South Africa:
A Comparison of Performance and Policy
4. Regulating Corporate Behaviour
5. Negotiating the TRIPs Agreement: India’s Experience
and Some Domestic Policy Issues
6. Regulatory Reforms in the Converging
Communications Sector
7. Market Access Implications of SPS and TBT
A Bangladesh Perspective
8. Multilateral Environmental Agreements, Trade and
Development: Issues and Policy Options
Concerning Compliance and Enforcement
9. Multilateral or Bilateral Investment Negotiations:
Where Can Developing Countries Make Themselves
Heard?
For more details, visit our website at www.cuts.org.
Child Labour in South Asia M 67
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68 M Child Labour in South Asia

Child Labour in South Asia M 69
 CUTS Centre for International Trade, Economics & Environment
Mission
Pursuing economic equity and social justice within and across borders by
persuading governments and empowering people

Enable and empower
representatives of the civil society,
from developing countries in
particular, to articulate and
advocate on the relevant issues at
the appropriate fora.
Goals
Create a questioning
society through empowerment
of civil society representatives
thus ensuring transparency
and accountability in the
system.
Promote equity between and
among the developed and
developing countries through
well-argued research and
advocacy on the emerging and
relevant issues.

International Advisory Board

Prof Jagdish Bhagwati
Arthur Lehman Professor of
Economics and Professor of Political Science
Columbia University, New York, USA, and
Chairman of the Advisory Board
Prof Muchkund Dubey
Former Foreign Secretary of India
New Delhi, India
Ms Ewa Charkiewicz
Institute of Social Studies
The Hague, The Netherlands
Mr Phil Evans
Senior Policy Officer, Consumers Asscn, London, UK
Ms Kristin Dawkins
Director (Research)
Institute for Trade and Agricultural Policy
Minneapolis, USA
Mr Mark Halle
European Representative
International Institute for Sustainable Development
Geneva, Switzerland
Prof Yash Tandon
Executive Director, International South Group Network
Harare, Zimbabwe
Ms Caroline LeQuesne-Lucas
Member of European Parliament
Oxford, UK
Ms Beatrice Chaytor
Programme Director
Trade Investment & Sustainable Development
FIELD, London, UK
Ms Janice Goodson Foerde
Chairperson, International Coalition for
Development Action, Brussels, Belgium

Prof Jasper A Okelo Mr Pradeep S. Mehta

Dept. of Economics, University of Nairobi Secretary General
Nairobi, Kenya Consumer Unity & Trust Society, Jaipur, India

ISBN 81-87222-82-4

CUTS Centre for International Trade, Economics & Environment

D-217, Bhaskar Marg, Bani Park, Jaipur 302 016, India
Ph: 91.141.2207482, Fax: 91.141.2207486
Email: cuts@cuts.org, Web Site: www.cuts.org